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Roche drawn into Chinese probe into pharma

State authorities visit regional offices of Swiss company
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Roche has confirmed that one of its offices in China has been visited by state authorities in what seems to be an extension of the country's ongoing investigation into pharma's business practices.

At the moment the purpose of the visit by officials from the State Administration for Industry and Commerce (SAIC) is unclear, although this is the agency that has taken the lead in the ongoing investigation into bribery and corruption among pharma companies, as well as a probe into the pricing of medicines sold in China.

"We understand that a local government unit in Hangzhou visited Roche's offices on May 21, but the specific details are not yet clear," said Roche in an emailed statement. "We will cooperate fully with the work of the relevant government department," it added.

China is an important growth market for Roche, with sales last year rising 21 per cent, well ahead of the other major emerging markets, thanks to strong take-up of the company's oncology drugs, in particular Avastin (bevacizumab) for lung and colorectal cancer and Herceptin (trastuzumab) for breast cancer.

Other companies visited by the SAIC in recent months include Roche's Swiss peer Novartis, Sanofi, AstraZeneca, Lilly and UCB, as well as several domestic drugmakers including Sanjing Pharmaceutical, Sinopharm and Shanghai Pharmaceutical.

There has been little follow-up news on the visits to other multinationals in the intervening months, with the companies involved staying tight-lipped on the progress of those investigations.

Most of the news emerging from the Chinese authorities and state media has focused firmly on GlaxoSmithKline. The company is accused of paying almost $490m in kickbacks to doctors and health officials using a series of middlemen, including travel agencies and consultancy firms. GSK's revenues in China have plummeted since the probe got underway.

Earlier this week reports in a Chinese newspaper also suggested GSK was accused of evading almost £10m ($16m) in taxes, and some sources are suggesting that the company itself might be charged with offences in addition to those levied against its local executives.

China's wide-ranging probe into bribery, fraud and anti-competitive practices in the pharma industry has been gathering pace, with a dossier on GSK's alleged wrongdoings now in the hands of prosecutors, although it is not yet clear when the prosecution might get underway.

Article by
Phil Taylor

23rd May 2014

From: Sales, Regulatory

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