Chinese Bribery Probe Hits More Drug Firms

Sanofi and Novartis are the latest drug companies to be investigated by Chinese authorities after claims of unethical sales practices by Western drug companies in China.

Last month, police in China detained four Glaxo­SmithKline managers and an AstraZeneca sales representative for alleged kickbacks to doctors and hospitals that prescribed or purchased the companies’ drugs.

Beijing municipal authorities now are looking into allegations that Sanofi paid bribes totaling about $275,000 to 503 doctors, according to the state-owned news agency Xinhua. An anonymous whistleblower said the bribes were given in the guise of clinical research grants to doctors at 79 hospitals in Beijing, Shanghai, Guangzhou, and Hangzhou in 2007, Xinhua reports.

Sanofi says the allegations relate to postmarket drug surveillance during which companies monitor the performance of a drug after approval. The Chinese investigation intends to look for lists of patient names and medical reports for these clinical research programs.

Meanwhile, Novartis confirms that a former employee in China, after resigning, filed a complaint with the local labor authority alleging improper business conduct. According to Chinese news reports, the employee says a manager ordered her to provide about $8,200 to doctors to achieve sales goals. The company points out that this employee also sought approximately $800,000 in compensation from Novartis.

Both Sanofi and Novartis say they are committed to ethical business practices and take any allegations of this kind seriously. The firms are conducting internal investigations. Depending on its findings, Novartis will “take appropriate actions,” the firm says. As part of its internal investigation, GSK has said it will lower its drug prices in China if it discovers that illicit payments inflated prices.

National government organizations are stepping up their efforts to curb bribery and other corrupt practices in China’s pharmaceutical industry. For example, the Chinese National Health & Family Planning Commission plans to blacklist any pharma companies and individuals involved, Xinhua reports. And China’s Food & Drug Administration has a campaign under way against manufacturing violations, counterfeit drugs, and unauthorized online drug sales.