Wednesday, July 24, 2013

More Astra staff held in China as GSK crisis deepens

Two more AstraZeneca sales executives have been arrested by Chinese police, but the drugs giant still maintains the swoop had nothing to do with China’s wide-ranging crackdown on bribery in the pharmaceutical industry.

Police first visited Astra’s Shanghai headquarters on Friday, days after rival GlaxoSmithKline faced allegations of a multimillion-pound bribery scandal, and detained a sales executive.

Officials in China yesterday released that worker but took away two more senior employees, both thought to be district sales managers. One is understood to be an American citizen.

“We still have no reason to believe that this is connected to any other investigation,” a spokesman for AstraZeneca said. “The information we are getting from the police is that this is an individual case, but we are still in the process of getting more information.”

Gao Feng, China’s head of economic crime investigation, accused GlaxoSmithKline last week of being a “criminal godfather” and “ringleader” in a bribery scandal involving payments of 3bn yuan (£320m) to doctors and hospitals over the past six years. At first GSK said the company had no idea why its Chinese offices were raided, and earlier this month it said: “We’re still unclear about the precise nature of this investigation.”

But on Monday it admitted wrongdoing by staff. Abbas Hussain, GSK’s president of international operations, said senior China-based executives “appear to have acted outside of our processes and controls, which breaches Chinese law”.

More damaging news hit GSK, Britain’s biggest drug maker, after it emerged that executives were warned nearly two years ago in an internal audit about problems with the way the company conducted research at its drug development centre in China.

The confidential document from November 2011, obtained by The New York Times, suggests that Glaxo’s problems may go beyond China’s bribery claims in the sales process and could reach its Shanghai R&D centre, which develops neurology drugs.

Meanwhile, rival drug makers Sanofi, Novartis, Merck and Roche have all admitted that they had also used the travel agency through which GSK allegedly funnelled payments of 3bn yuan. These companies have not been accused of wrongdoing, however.

The pharmaceutical groups said they stopped working with the travel agent, Shanghai Linjiang, when the allegations of wrongdoing surfaced.


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