European business leaders are taking up Pharma's case in China. Foreign drugmakers have been singled out unfairly in Chinese investigations into bribery and anticompetitive pricing, the European Union Chamber of Commerce says. Fighting corruption is great--but the crackdown has to extend to domestic drugmakers, too.
In fact, one official says, it's the very companies with the strongest compliance procedures that are attracting the most government scrutiny. Foreign multinationals have been "at large" very responsible, the chamber's top pharma official, Bruno Gensburger, told Reuters. "To my knowledge today, no Chinese company has been investigated."
That an EU business lobby is running to Pharma's aid isn't surprising. After all, it's U.K.-based GlaxoSmithKline ($GSK) that's at the center of the current probe. Just yesterday, a Chinese newspaper reported that GSK may face huge fines for alleged bribery, and that the company itself, not just rogue employees, sanctioned a payoff scheme amounting to almost $490 million.
Plus, most of the other companies visited by Chinese authorities in recent weeks--whether in relation to actual allegations or not--are based in Europe, if not the EU. France's Sanofi ($SNY) is under official investigation after a whistleblower accused the company of bribing more than 500 doctors to increase use of a diabetes drug. And Switzerland's Novartis ($NVS) is internally investigating another set of whistleblower allegations. Authorities have questioned sales reps at U.K.-based AstraZeneca ($AZN) and have stopped by facilities owned by Denmark's Lundbeck and Novo Nordisk ($NVO), and Belgium's UCB.
Chinese officials have denied that they're passing over violations at domestic drugmakers. But in an EU position paper, the chamber accused the government of attacking foreign companies and supporting domestic drugmakers.
And then there's the fact that China appears to be strong-arming detainees to confess on television, calling into question its commitment to handling the accusations under the rule of law. EU Chamber President Davide Cucino told Reuters that European businesses don't want to stop China from cracking down on corruption--but they do ask for cases to be handled by the book. Plus, the lobbying group wants the corruption and antitrust probes to focus on Chinese-based companies as well as foreign ones.
- read the Reuters news
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