China's Sino Biopharm reels after CCTV accuses unit of bribing doctors

The Chinese said they wouldn't ignore home-grown corruption in pharma. Now, that promise is fulfilled. State-owned television network CCTV broadcast bribery allegations against a unit of Sino Biopharmaceutical, saying the company sent doctors on vacations abroad to boost sales of its drugs.

Meanwhile, a smaller, privately held drugmaker, Gan & Lee Pharmaceuticals, says it's looking into allegations that it spent 800 million yuan ($130.7 million) to bribe doctors over a 5-year period, Reuters reports.

Sino and Gan & Lee join several foreign drugmakers accused of bribery, corruption or overpricing. The pharma corruption probe emerged with a bang in July, when police detained GlaxoSmithKline ($GSK) managers on suspicion of bribery. As investigators broadened the scope of their inquiries, whistleblowers leveled accusations against Sanofi ($SNY), Eli Lilly ($LLY) and Novartis ($NVS). So far, those allegations have inspired authorities to rope Sanofi and Novartis into their official probe. All four Big Pharma companies say they are investigating the allegations internally. Johnson & Johnson ($JNJ), meanwhile, was fined by Chinese authorities for monopolistic pricing.

According to the CCTV report, two groups of doctors attended meetings organized by Sino unit Jiangsu Chia Tai-Tianqing in China and then departed on expenses-paid trips. Those junkets could be interpreted as illegal bribes, the network reported (as reported by Reuters). For some overseas trips, the company paid about 6,500 yuan, or $1,100, per doctor.

According to Bloomberg, the broadcast included images of a company invitation to one confab, scheduled for Aug. 21: "After the meeting, Chia Tai Tianqing's Tiance products group has prepared an exciting and comfortable trip for you to Chiang Mai, Thailand. We believe this medical meeting will leave you with deep and beautiful memories."

Sino says it dispatched an internal team to investigate the allegations. The team hasn't yet drawn any conclusions, but a company spokesman told Reuters the problem doesn't extend beyond the subsidiary. "When they clarify the problem, we will have a better idea at head office in Beijing," the spokesman told the news service.

Sino's shares went skydiving after the CCTV broadcast. The Hong Kong-listed stock dropped as much as 25% before trading was halted. Already, at least one analyst has downgraded the shares. 

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