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Sanofi drawn into Chinese corruption probe

Joins GSK, UCB, AZ , Lilly, Novo and Lundbeck as companies under scrutiny

China flag thumbSanofi is the latest pharma company to come under scrutiny in China for its business practices as local media reports claim it paid bribes to doctors.

A report in the 21st Century Business Herald newspaper - citing an anonymous whistleblower - claims that Sanofi paid 1.7m Chinese renminbi (around $280,000) to more than 500 doctors at hospitals in Shanghai, Beijing, Hangzhou and Guangzhou.

Sanofi revealed earlier this month that one of its sales offices in China was visited by the State Administration for Industry and Commerce (SAIC), the Chinese government department that is also investigating allegations of corruption by GlaxoSmithKline.

The payments are said to have been labelled as spending for research but were actually inducement for prescribing Sanofi medicines, according to the allegations made in the newspaper. The article suggests Sanofi staff paid doctors a bounty of 80 yuan (around $13) when a patient bought one of the company's products.

In a statement, Sanofi said it is taking the allegations "very seriously" but stressed it would be premature to comment further on the media report.

"We have zero tolerance to any unethical practice," added the company. "Sanofi has established processes in place for reviewing and addressing such issues in a manner that is consistent with our legal and ethical obligations."

Novo Nordisk and Lundbeck contacted
Meanwhile, both Novo Nordisk and Lundbeck have said in comments made during the interim results conferences they have also been contacted by the Chinese authorities, joining other drugmakers including Lilly, AstraZeneca and UCB.

Novo Nordisk said it was contacted by the SAIC's branch in Tianjin - where it operates a manufacturing facility - on August 1. It has not however been notified of any formal investigation, said chief executive Lars Rebien Sørensen.

Meanwhile, Lundbeck chief executive Ulf Wiinberg told the Financial Times that its head office in Beijing had also received enquiries "related to the marketing of medicines".

The allegations of corruption come against a backdrop of a broader investigation by China into the prices of medicines sold on the domestic market by around 60 companies.

Article by
Phil Taylor

9th August 2013

From: Regulatory

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