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Novartis drawn into Chinese corruption probe

Former sales rep files bribery complaint about Sandostatin LAR prescribing practices

Novartis building 

Novartis has become the latest Western drugmaker to be accused of bribing doctors in China and has started an investigation into the allegations.

The claims were made by a former sales representative at the company's Chinese operations who has reportedly filed a complaint with the authorities, saying she was instructed to pay bribes to doctors in return for prescribing Novartis drugs.

Specifically, the unnamed rep said she was told to pay inducements of 50,000 yuan (around $8,000) to doctors who had prescribed at least five doses of Novartis' growth hormone inhibitor Sandostatin LAR (octreotide), used to treat some forms of gastrointestinal cancer. 

Novartis said it had launched an internal investigation into the allegations, and said the whistleblower had filed a claim for 5m yuan ($800,000) in compensation after resigning from the company.

"Novartis takes allegations of misconduct seriously and will take appropriate actions depending on the findings once the investigation is concluded, said the company in a statement.

The latest allegations emerged in an article published by the 21st Century Business Herald, the same newspaper that published claims that Sanofi had offered bribes of around $280,000 to more than 500 doctors in China.

Novartis is now the third company to have been accused of paying bribes, after GlaxoSmithKline was linked to the payment of almost $490m in kickbacks to doctors and health officials using a series of middlemen, including travel agencies and consultancy firms. 

All three companies say they are cooperating with the authorities and there is speculation that other drugmakers may also soon be dragged into the probe amid suggestions that there has been a culture of paying kickbacks by the pharma industry - particularly to doctors in state-run hospitals who are generally low-paid - over many years. 

Last week, China's State Administration for Industry and Commerce (SAIC) unveiled a three-month probe into bribery in the pharmaceutical and medical device industries. 

Other companies reporting they have already been visited by the authorities in recent weeks include Novo Nordisk, Lundbeck, Lilly, AstraZeneca, and UCB.

19th August 2013

From: Sales, Regulatory

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