Pharma Execs Consider Fleeing China's Corruption Crackdown

Mad In America;

June 14, 2014

Business Week has run a Reuters Shanghai article recounting how increasing numbers of senior drug company executives are considering leaving China due to the government’s on-going crackdown on bribery and corruption in the pharmaceutical industry. Last month Chinese police “shocked the business community,” says Reuters, when corruption charges were laid against the former head of GlaxoSmithKline whom now “could face decades in prison.”

“Many of our clients are asking about personal liabilities and insurance, with executives asking if they are put in jail what will happen to their families and how the company will provide protection for them,” John Huang of law firm MWE China told Reuters. A leaked memo from the Chinese Health Ministry, says Reuters, specifically named Eli Lilly, Novo Nordisk and AstraZeneca as suspect companies, while Novo Nordisk, Eli Lilly and Roche all changed their China heads in the past year.

After their own “fact-finding enquiries,” a 2013 business advisory from Deloitte’s Forensic Division in China had warned pharmaceutical executives of a list of their activities that were “risk areas” for possible corruption charges, including “payments to key opinion leaders” and gifts and travel reimbursements to health care practitioners. Deloitte’s list is similar to the activities the U.S. Department of Justice listed in its $3 billion settlement with GSK in 2012, which in large part concerned GSK’s inappropriate promoting of its popular psychotropics Paxil and Wellbutrin — though no U.S. executives were jailed.

Spooked by probes, pharma executives ask: should I leave China? (Reuters Shanghai, Business Week)

Corruption Risk in the Chinese Pharmaceutical Market (Deloitte Forensic, China)

GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data (U.S. Department of Justice)

This entry was posted in Corruption & Accountability, Featured News, In the News by Rob Wipond. Bookmark the permalink.

Thank You Mr Wipond and MIA.

Chinese Officials To Shed Some Light on Glaxo Probe At Press Briefing

fiercepharma has;
Chinese Officials To Shed Some Light on Glaxo Probe At Press Briefing
May 13, 2014 | By Carly Helfand

What lies ahead for GlaxoSmithKline ($GSK) in China? The company has been waiting to find out since last summer, when investigators there charged it in a massive bribery scheme. But Glaxo may finally get some answers Wednesday, when Chinese police will brief the media about the drugmaker.

Officials have been investigating the pharma giant since July for allegedly funneling up to $489 million in bribes to doctors and other healthcare providers. China's Ministry of Public Security offered no details on Wednesday's press briefing, Reuters reports, but a Glaxo spokesman confirmed that the company is aware it's coming.

"We take the allegations that have been made extremely seriously and we are continuing to cooperate fully with the Chinese authorities in this investigation," he told the news service in a statement.

Once upon a time, officials in China talked about levying "astronomical" fines on the British company. Later, however, reports said the company would likely escape corruption charges, though some of those local execs--four of whom Chinese police detained last year--probably wouldn't. Glaxo has already admitted that some of its senior Chinese execs appear to have breached the law and promised price cuts in penance.

While GSK also faces the possibility of punishment in its home country and in the U.S., so far its only penalty has been a chill on sales that won't go away. The investigation in China cost Glaxo's emerging markets growth 2% in pharma and vaccines in Q1, with Chinese growth plunging 20% to £137 million ($230 million).

But that could soon be changing, regardless of what Chinese officials have to say on Wednesday. Last month, Glaxo launched probes in Jordan, Lebanon, Iraq and Poland after whistleblowers called the company out on underhanded marketing practices--like hiring government-employed doctors and pharmacists as paid GSK reps and paying top physicians speaking fees for lectures that never took place.

- get more from Reuters

Special Reports: Top 10 Drugmakers in Emerging Markets - GSK | The top 10 pharma companies by 2013 revenue - GlaxoSmithKline

Related Articles:
Advair slide, China woes drop-kick Glaxo profits in Q1
GlaxoSmithKline steps up bribery probes, eyeing potential violations in 9 Middle Eastern countries
Big Pharma dusts itself off in China scandal, but crackdown isn't over
British penalties for China bribery may be on the way for GSK
GlaxoSmithKline's China unit officially engineered bribery, police say
China probes of Glaxo, Sanofi, others put big chill on key growth market
China calls GSK 'godfather' in alleged bribery scheme
GlaxoSmithKline exec admits 'breaches,' promises price cuts in China

Thank You Ms Helfand and Fierce Pharma.

Bristol Meyers Squibb Bribery Probe

Fierce Pharma has;

Bristol-Meyers Squibb Confirms It's The Target Of A Bribery Probe

Another disclosure is evidence of how widespread the practice is

April 26, 2012 | By Eric Palmer

Bristol-Myers Squibb ($BMY) has made it official. It is under federal investigation, potentially for foreign bribery.

In a filing Thursday, it just said that the SEC has started a probe of its sales and marketing departments and that last month it received a subpoena tied to the Foreign Corrupt Practices Act (FCPA). Nothing more was disclosed and the company didn't want to comment, reports the Financial Times.

The publication in January listed Bristol Myers among a host of companies being investigated for bribes. It says U.S. investigators started an inquiry on BMS after a German prosecutor started checking into its practices there.

There have been so many FCPA cases filed or settled recently that it is pretty clear it's a common practice in the pharmaceutical and medical device industries to bribe foreign officials, in many cases doctors working in national health systems, to sell more product.

The U.S. has been aggressive in this realm. Johnson & Johnson ($JNJ) agreed to pay $70 million in the U.S. to wrap up an FCPA investigation, and U.K. investigators won a £5 million ($8.1 million) payment. The allegations included payments in Iraq, Greece, Poland and Romania. Other companies targeted in FCPA probes include Pfizer ($PFE) Merck ($MRK), Baxter ($BAX), Eli Lilly ($LLY), GlaxoSmithKline ($GSK) and AstraZeneca ($AZN), according to the Financial Times.

Biomet recently settled a probe with the Department of Justice on allegations of bribing public healthcare workers in Argentina, Brazil and China to secure business with hospitals.

Other countries also have launched their own corruption probes, the FT points out. Investigations in Serbia roped in AstraZeneca, Actavis, Sanofi ($SNY), Roche ($RHHBY) and PharmaSwiss, among others.

- read the Financial Times piece

Related Articles:
Amid FCPA probe, AZ indicted in Serbia for bribery
Depuy pays $7.9 million to end UK bribe case
Gov't probes laundry list of drugmakers
Biomet to cough up almost $23M to settle bribery charges


Thank You Fierce Pharma and Mr Palmer

"is pretty clear it's a common practice in the pharmaceutical and medical device industries to bribe foreign officials, in many cases doctors working in national health systems"

And putting even More of our own, already grotesquely over lawyered, Bribeable 17% of GDP under National Control is a good idea Why?




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