While the pharma c-suite ponders stepped up regulatory interest in corruption, consider the penalty for bad behavior in China. A Shanghai court just sentenced the former ceo of Shanghai Pharmaceutical, a state-owned drugmaker, to a suspended death sentence for corrupt activities in which he amassed more than $8 million, theAssociated Press reports.
Wu Jianwen was convicted of accepting bribes, embezzling public funds and other graft charges by the Shanghai Intermediate People's Court, and will likely see his sentence commuted to life in prison. The move comes as China attempts to rehabilitate its image as a nation that produces and exports tainted pharmaceuticals and foods.
For those not tracking such things, four years ago, China executed Zheng Xiaoyu, the former head of its food and drug regulatory authority, for approving untested medicine in exchange for cash. During his tenure, the agency approved six meds that turned out to be fake, and drugmakers used falsified documents to apply for approvals. One antibiotic caused the deaths of at least 10 people (see this). Shanghai Pharma is reportedly China's third-largest drugmaker and second-largest distributor, and is also the parent company of Shanghai Hua Lian Pharmaceutical, which was shut down in 2007 for making tainted leukemia drugs blamed for causing partial paralysis among dozens of patients. The drugmaker was later identified as the sole US supplier of the abortion pill, mifepristone, or RU-486 (read here).
Corruption in China is seen as a pervasive problem. A recent survey of 3,000 business executives by Transparency International, which tracks bad behavior around the world, found that, after Russia, China is perceived as the country where companies are most likely to offer something under the table (see this).
Meanwhile, regulators in the US and elsewhere are widening probes into alleged overseas corruption by the pharmaceutical industry. Over the past couple of years, several big drugmakers have received letters as the federal government seeks to uncover violations of the Foreign Corrupt Practices Act, which forbids US companies from bribing foreign government officials. Whether any executives receive a death sentence remains to be seen.
Last August, AstraZeneca received a criminal indictment in Belgrade, Serbia, over allegations that local employees offered alleged bribes to physicians at the Institute of Oncology and Radiology (look here). In April, Johnson & Johnson was fined $70 million for bribing public doctors in several European countries - and paying kickbacks to Iraq - to illegally obtain business (read here).
jail pic thx to tim pearce on flickr