The latest drugmaker to become implicated in the bribery scandal overtaking the global pharmaceutical industry in China is Novartis. A former sales rep alleges the drugmaker offered bribes to doctors in some hospitals to drive sales of its Sandostatin LAR medication, which is used to treat cancers of the stomach, intestine and pancreas, The Shanghai Daily writes, citing a report in the 21st Century Business Herald.
The rep, who was only identified as ‘Li Li,’ claims she was ordered to ensure that nearly $105,000 in sales were achieved by providing about $8,000 to doctors. The bribe was purportedly suggested by a supervisor since ‘Li’ was having difficulty meeting targets over the past two months. She also maintained that reps were told to persuade doctors to prescribe the drug for unapproved uses.
In its defense, the drugmaker tells the paper that the rep began working its oncology business unit in January and was in charge of sales to major hospitals in northeastern China. The rep is reportedly seeking more than $800,000 in compensation, although Novartis plans to pursue disciplinary action if there was any misconduct or violations of its policies or Chinese law.
This is only the latest lurid allegation to surface as a result of the bribery scandal. A few days ago, a whistleblower claimed that Sanofi had offered ‘research grants’ worth more than $275,000 to at least 500 doctors in 79 hospitals in China. The Shanghai Health and Family Planning Commission is now monitoring connections to the drugmaker, the use of Sanofi (SNY) drugs and any payments made.
The ruckus began after Chinese authorities began investigating GlaxoSmithKline (GSK) for bribing doctors and government officials to boost sales of its drugs. So far, Chinese police have detained four of its Chinese executives and questioned at least 18 other staff amid allegations the drugmaker funneled up to $489 million to travel agencies to pay bribes, as well as sexual favors, to doctors and officials (more here).
Meanwhile, at least two AstraZeneca (AZN) employees were questioned by Chinese authorities, and Eli Lilly (LLY), UCB, Novo Nordisk and Lundbeck have all acknowledged that authorities have visited their facilities as well or contacted them for information about their business practices.
As noted previously, the developments are, not surprisingly, being interpreted in different ways. The Chinese government, for instance, is believed by some to use the probes as an opportunity to bolster its own domestic pharmaceutical industry or simply use this as leverage to extract lower prices from global drugmakers. The National Development and Reform Commission, you may recall, is examining pricing by 60 drugmakers, including both local and multi-national companies.
STORY ENDS HERE
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