Beijing expands GSK bribery probe to other multinationals

Want China Times, Staff Reporter 2013-07-24

The foyer of a UCB office in Shanghai. (Internet Photo)

Nearly one month after reports that Beijing is investigating bribery allegations against British pharmaceutical giant GlaxoSmithKline in China, authorities have expanded the probe to other multinational drug companies such as the US-based Abbott Laboratories, UK-based AstraZeneca, and Swiss-based Novartis, reports the Shanghai-based First Financial Daily.

Last Friday, Belgian biopharmaceutical company UCB confirmed that officials from China's State Administration for Industry & Commerce (SAIC) have launched an investigation into several multinational drug companies and domestic drug firms including UCB's office in Shanghai, the paper said.

GSK is facing its biggest risk in China since entering the country in 1908, as police are investigating whether its executives are involved in alleged economic crimes, according to Beijing's Economic Observer. Meanwhile, on June 28 a police officer surnamed Hu at the Changsha Public Security Bureau confirmed that his office is investigating GSK China executives involving in alleged bribery, saying that the case is still ongoing.

Various sources said China is expanding its probe to cover other multinational drug companies. In the latter half of last week, SAIC officials paid visits to various branch offices of Abbott Laboratories, AstraZeneca and Novartis.

According to a July 18 request notice from Nanjing's SAIC branch, the administration demanded that an unnamed foreign drug company cooperate with the investigation, the First Financial Daily said. An anonymous sales manager at one of the foreign drug company said his company has already held several internal meetings regarding the matter. He added that SAIC officials visited several foreign drug firms last week, and executives of two foreign firms were requested to report to the SAIC offices for further investigation.

At a time when Chinese officials are investigating the GSK case, doctors are also being cautious, with many of them cancelling meetings or seminars with foreign drug firms, the paper said. Meanwhile, related drug firms have declined to comment on the probe, with Abbott Laboratories and also Novartis refusing to confirm whether they received visits from SAIC officials.

According to an insider, multinational drug companies will now have to compromise on their pricing strategies, facing pressure to cut their drug prices in China, especially at a time when many of their drug patents will expire. Among the world's top 20 drug companies, 35% of their drugs will saw their patents expire between 2009 and 2013. Last year, drug companies suffered a loss of over US$35 billion from expired patents, a increase from the US$20.4 billion reported in 2011, according to research firm EvaluatePharma.

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