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Friday, July 12, 2013

GSK China under investigation for backhanders to doctors

Want China Times, Staff Reporter 2013-07-12

A woman in front of a GSK sign. (Photo/CFP)

British multinational pharmaceutical firm GlaxoSmithKline's China division has been under investigation by police as staff members are suspected of bribing and rewarding healthcare workers or hospitals by cash payments or free trips to encourage doctors to prescribe the firm's medicines, according to the China Business Journal.

GSK China has been under the spotlight recently since it sacked Zang Jingwu, the firm's vice president and the president of its R&D center in China, for allegedly publishing false data in his article published in medical journal Nature Medicine in 2010. Four of the 16 people who are also staff members and co-wrote the article have since resigned since. The future of the Chinese division's R&D center has been unknown since Zang's departure in mid-June.

Police and GSK did not elaborate on the purpose of their investigation, but "commercial bribery" is widely considered the real reason. Doctors in China reportedly between 2004 and 2010 often decided what medicines they would prescribe according to the rewards they got from pharmaceutical companies instead of their patients' needs.

Police in Changsha, Shanghai, Henan and Zhengzhou are now investigating the Chinese division which allegedly bribed or provided rewards to officials, medical associations, hospitals and doctors in order to increase the distribution channels for its drugs and raise their prices.

A former senior manager of the division reportedly tipped off the police, leading to the probe. The manager left the firm at the end of last year and was reportedly not happy with the firm's compensation package. He submitted evidences of the backhanders to GSK headquarters and the police.

Such practices are illegal but nonetheless common in China's healthcare industry. Pharmaceutical companies domestic and foreign alike must give doctors certain kickbacks in order to do business in the country, said a person familiar with the sector. It has been very difficult for firms to eliminate the practice since their staff are under pressure to increase sales.

Some salespersons working for pharmaceuticals offer doctors incentives in the form of junkets. Since doctors in China are also required to publish articles in international journals regularly in order to pass performance evaluations, some sales personnel have also been known to pull strings to help doctors publishing articles, thus different roles in the industry can scratch each other's back very nicely.
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