Authorities visit Roche China offices
pharmafile | May 23, 2014 | News story | Manufacturing and Production, Medical Communications, Sales and Marketing | China, GSK, Roche, Witty, hangzhou, saic
A unit of China’s antitrust regulator has visited Roche’s offices in Hangzhou, according to media reports.
The pharma industry has been in well-publicised hot water in China for the best part of a year, with GlaxoSmithKline at the fore of Chinese investigators’ probes into corruption.
News agencies Reuters and Bloomberg reported that Roche had confirmed that its offices in the east of the country, 100 miles from Shanghai, received a visit this week from officers of the State Administration for Industry and Commerce (SAIC).
“We understand that a local government unit in Hangzhou visited Roche’s offices on 21 May, but the specific details are not yet clear,” Roche tells Reuters. “We will co-operate fully with the work of the relevant government department.”
An employment lawyer told Bloomberg that more such instances of investigation would be seen. “President Xi Jinping has indicated one of his policy goals is cracking down on corruption, so there’ll likely be more cases going forward,” says Kevin Jones of Faegre Baker Daniels.
“Foreign companies are an easy target because they’re generally held to a higher standard,” he adds.
“More and more firms have been visited by the SAIC in the wake of the GSK case,” John Huang, Shanghai-based managing partner at law firm MWE China explains to Reuters.
Earlier this month a British man who headed GSK’s troubled China business was charged with two other executives on charges of bribery and corruption.
The official Xinhua news agency, quoting police in Hunan province, said Mark Reilly and two Chinese executives, Zhang Guowei and Zhao Hongyan, have been charged by authorities in the country on the suspicion of bribing officials in the industry and commerce departments of Beijing and Shanghai.
Chinese officials have accused GSK of using a £320 million fund to offer cash, prostitutes and gifts to doctors – and GSK itself has described such activity as ‘shameful’.
GSK chief executive Sir Andrew Witty has already seen his bonus for last year substantially reduced because of the reputational damage to the company caused by the ongoing issues in China.
Although several pharma companies have been under the microscope in China, the investigations into GSK have received the most coverage.
Last month a former sales representative for the company told a Financial Times journalist in Shanghai, that bribing poorly-paid doctors in China in order to prescribe its medicines was part of GSK’s culture.
The manufacturer itself has insisted that such activities are beyond the pale.
“The behaviour described by this ex-employee is completely unacceptable and we have zero tolerance for unethical conduct of this kind,” the company said. “We believe the vast majority of our employees in China operate to the highest standards and anyone who does not has no place in our company.”
Adam Hill
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