Noting New Then GlaxoSmithKline says Chinese laws might have been violated By Leslie Hook in Beijing and Lina Saigol and Andrew Jack in London China’s investigation of how western drug companies operate in the country broadened on Monday as GlaxoSmithKline admitted wrongdoing by staff. Abbas Hussain, GSK’s president of international operations, said that senior China-based executives “appear to have acted outside of our processes and controls which breaches Chinese law”. In a nod to the Chinese government’s concerns about soaring healthcare costs, Mr Hussain pledged that GSK would reduce drug prices in China by making changes to its operating model that would lower costs. China’s ministry of public security said that Mr Hussain also “apologised” during a meeting with police officials on Sunday. The moves from one of the world’s largest pharmaceutical companies highlight the growing clout of Chinese regulators and police, who are becoming increasingly assertive in regulating foreign companies. GSK is being investigated by Chinese police for alleged bribery and tax irregularities as part of a complex scheme that allegedly provided doctors with cash and gifts in exchange for prescribing medicines, using travel agencies and consultancies as intermediaries. Chinese police have detained four China-based GSK executives and banned a fifth – finance director Steve Nechelput – from leaving the country. Shanghai police have also detained a senior British fraud investigator who previously worked with GSK, although they have not said his detention was linked to his association with the pharmaceuticals company. Several western drug companies used the Shanghai travel agency named in the widening corruption probe by the Chinese authorities. The Shanghai Linjiang International Travel Agency was used by GSK as well as companies including European groups Roche and Sanofi , Novartis and Merck of the US, all of which have severed links since the Public Security Bureau identified the agency in its inquiries concerning bribery. The details of wider connections, first reported in the New York Times, came as other companies launched reviews of their links to the agency, and AstraZeneca separately said one of its sales representatives in China had been visited by police last Friday and questioned. “We believe that this investigation relates to an individual case and, while we have not yet received an update from the Public Security Bureau, we have no reason to believe it’s related to any other investigations,” Astra said in a statement. The representative was taken away for questioning on Friday. UCB of Belgium has also reported a separate “routine” visit by the Chinese antitrust authorities, at a time of growing scrutiny of the high cost of medicines prices in the country. Switzerland’s Roche said on Monday it had until recently also used the Shanghai Linjiang travel agency but had not been visited or contacted by the authorities. “Roche does not tolerate violations of our code of conduct, neither by company employees, nor by suppliers,” the company said. “Once allegations of illegal behaviour by this agency on behalf of other parties were made public, we made an internal decision to immediately stop working with this agency and we have begun to review the documentation of our previous interactions with them. This review is currently ongoing.”
Posted on: Tue, 23 Jul 2013 08:42:25 +0000
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