WSJ: Baxter acknowledges it found irregular payments by China joint venture

"Bribery" is the word on everyone's mind in China as the GlaxoSmithKline ($GSK) bribery probe deepens and expands out toward other drugmakers. Big Pharma companies are fighting to stay out of the spotlight as authorities show up to visit them. But Thursday, Baxter International ($BAX) found itself in the hot seat for expense violations it found last year.

According to the The Wall Street Journal, Baxter uncovered expense violations in July 2012 from a joint venture in China, which went undisclosed until the WSJ contacted it with an anonymous tipster's information that employees at the venture fabricated conferences as part of a bribery scheme. The venture, Guangzhou Baxter Qiaoguang Healthcare Co., reported problems internally at the time, and the company investigated the matter and "took actions in a prompt and responsible manner," Baxter told the WSJ.

Documents from the tipster allege that the JV's employees paid travel agencies to arrange conferences with Chinese health officials between 2011 and 2012. But employees at hotels that were indicated as conference sites in the documents say they have no records of the events having taken place, the WSJ reports. As the tipster's allegations go, that cash was diverted by the travel agencies back to the venture and was later used to bribe Chinese government officials in order to win concessions for the venture's products.

The allegations are reminiscent of those against GlaxoSmithKline, which also involve a travel agency facilitating bribes--this one to doctors and officials. But a Baxter spokeswoman maintained that "the company has not been contacted by Chinese authorities and is not aware of any active Chinese investigations of potential improper payments by Baxter or the BQ joint venture," according to the Journal.

Sanofi ($SNY) and Johnson & Johnson ($JNJ) are among the latest to come into contact with Chinese authorities as the GSK investigation continues. Officials recently visited one of Sanofi's 11 regional offices in China, though CEO Chris Viehbacher said Thursday that the company is "not really aware of the purpose of the visit" and that the French drugmaker's Chinese headquarters has not been contacted. And J&J is currently facing a fine upward of $85,000 for minimum resale prices that a Shanghai court has ruled monopolistic.

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