Germany's Bayer joins crowd of companies under Chinese investigation

Add Bayer to the list of companies Chinese authorities are investigating. Friday, a Bayer spokeswoman told The Wall Street Journal China's probe has reached the German pharma for a "potential case of unfair competition" as the country's government continues its industry-wide crackdown.

According to the Journal, a representative from China's corporate registry, the State Administration for Industry and Commerce (AIC), visited an unspecified Bayer office in China at the end of August, the spokeswoman says. "We are fully cooperating with the authority," she told the WSJ without providing further details.

In July, AIC head Zhang Mao announced that regulators were looking to give China's commercial sector a facelift, increasing enforcement of monopoly, competition and trademark laws. This summer, the AIC has visited offices of other drugmakers in addition to Bayer, including Novo Nordisk ($NVO), which says it hasn't faced accusations of wrongdoing, and Sanofi ($SNY), which says it is cooperating with investigators.

What started as a bribery investigation of GlaxoSmithKline ($GSK) has radiated out to several other companies as China aims to bring its healthcare costs under control. After leveling accusations that the British pharma used a travel agency to funnel $489 million in bribes and favors to Chinese doctors and officials, China's government has expanded its bribery probe to include multinationals Novartis ($NVS), Sanofi and Eli Lilly ($LLY). That probe has already yielded reduced costs for China, as Glaxo's emerging markets chief, Abbas Hussain, promised price cuts after admitting the company's execs had likely breached Chinese law.

But it's no longer just foreign companies that Chinese authorities are targeting. After EU leaders last week slammed the country for singling out non-Chinese companies, state-owned television network CCTV broadcast bribery allegations against a unit of Sino Biopharmaceutical, reporting the company sent doctors on trips abroad to hike sales of its meds.

- see the WSJ piece (sub. req.)

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