Foreign pharmas tread warily following GSK scandal in China

Want China Times, Staff Reporter 2013-08-02

A GSK office in China. (Photo/CFP)

The Chinese operations of Sanofi and Eli Lilly, which both rank among the world's top 10 pharmaceutical firms, have been placed under investigation for irregularities by authorities in the country, joining the long list of investigative targets which has included such global heavyweights as AstraZeneca, Roche, Pfizer and Bayer.

While admitting that they are under investigation, both Sanofi and Eli Lilly said however that the recent raids on their offices were regular inspections, according to Guangzhou's 21s Century Business Herald. "Shenyang city officials did visit our office in Shenyang on July 29. Although we are not sure of their purpose, we assure that Sonafi China, like the company's operations in other nations, follows the highest ethical standards and strictly abides by local laws and regulations," the company said. Eli Lilly has also issued a similar statement.

The progress of the investigation into bribery and backhanders in China's pharmaceutical industry has been rather slow due to the involvement of many enterprises. An executive from a major foreign pharmaceutical firm says that in order to avoid greater trouble, many foreign pharmaceutical firms would choose to accept fines rather than object to the probe.

An insider notes that in response to the instruction of superiors or on their own initiative, government industrial and commercial agencies from time to time raid consumer product enterprises or pharmaceutical firms, probing traces of irregularities in company documents, business accounts, computer files and even trash bins.

The current wave of investigations comes in the wake of the GlaxoSmithKline (GSK) scandal, where sales representatives from the company were heavily fined for offering bribes and other incentives to doctors to buy their drugs. A Pfizer sales representative was recently taken away for investigation but this was only an isolated case involving a doctor-patient dispute and had nothing to do with bribery, according to Pfizer.

"Recently, doctors are advised to avoid attending events sponsored by pharmaceutical firms and medicine sales reps are subject to various restrictions when visiting doctors or hospital officials in order to maintain a low profile during the turbulence," reports Chen Wei, an industry insider.

Some sales reps admit encountering investigators when visiting hospitals, as the latter want to learn more about the shady dealings that have driven up drug prices for members of the public. Some big pharmaceutical firms have instructed their sales reps not to visit doctors at the current time. Both Sanofi and Roche have suspended their national marketing meetings scheduled for the second half this year in order to avoid drawing further scrutiny.

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