China widens pharma graft probe to at least 4 MNCs

China widens pharma graft probe to at least 4 MNCs

BEIJING - China is investigating at least four multinational drugmakers as it widens its probe of GlaxoSmithKline, according to a lawyer in Hong Kong whose firm advises companies on cross-border anti-corruption.

The investigations point to an increased targeting of the pharmaceutical industry in corruption probes as the world's most populous country faces rising health-care costs and seeks to lower drug prices.

"We are aware of four pharmaceutical companies who are facing" investigation by local anti-corruption units, said Ms Wendy Wysong, head of anti-corruption practice in Asia-Pacific at law firm Clifford Chance. She declined to identify the companies.

On Monday, Chinese officials said Glaxo used travel agencies as a conduit for bribes, that company executives received "sexual bribes", and that other drugmakers have transferred money to the agencies.

China, the world's fastest-growing market for medicines, has become an important target for the pharmaceutical industry as more and more best-selling therapies have gone off patent.

Glaxo's revenue from China increased 17 per cent last year to £759 million (S$1.4 billion), while product sales for AstraZeneca rose 20 per cent in China to US$1.5 billion (S$1.9 billion).

Pfizer and Merck, the two biggest US drugmakers, together employ about 14,000 people in China.

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