Are more drugmakers at risk of corruption probes in China? After GlaxoSmithKline employees were detained in an investigation of "economic crimes," industry watchers point out that the Chinese government recently reorganized its Food and Drug Administration. The healthcare system is in the midst of reform, with officials keeping an eye out for corruption.
As Bloomberg reports, it's too soon to tell whether the Glaxo ($GSK) investigation is the first in a wave of pharma probes, á la the antitrust crackdown in Europe. But in general, anti-corruption action is increasing in China, an EU Chamber of Commerce official told the news service.
"In recent months, we've seen more actions and police investigations in relation to corruption in companies in China by Chinese authorities," Ronan Diot said (as quoted by Bloomberg). "It sometimes happens that people are detained for a few hours or a few days."
Glaxo says it's not sure, exactly, what Chinese authorities are now investigating. Earlier this month, the company said it had investigated a whistleblower's allegations of kickbacks and off-label marketing in China and found nothing. Was law enforcement's move prompted by the same accusations?
"We are still unclear on what the precise nature of the investigation is," Glaxo spokesman Simon Steel told the news service. "We don't know if it's connected to the whistleblower's bribery and corruption allegations."
Already, the pharma industry has been put on notice by U.S. authorities intent on rooting out corruption. A who's who among Big Pharma has been notified that it's under investigation for potential violations of the Foreign Corrupt Practices Act as part of a broader FCPA crackdown. Johnson & Johnson ($JNJ) and Pfizer ($PFE) have settled FCPA allegations, while Glaxo, Bristol-Myers Squibb ($BMY), Merck ($MRK), Eli Lilly ($LLY) and others are still under investigation.
With all eyes on the Glaxo case in China--and industry groups digging for more information--we should soon see whether more is to come.
- see the Bloomberg article
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