AstraZeneca executive detained after Chinese police raid Shanghai HQ

Investigators question sales rep for British drugs giant a week after rival Glaxo was accused of bribery

Police are investigating AstraZeneca’s work in China and have detained one of the drug maker’s executives, just a week after its rival GlaxoSmithKline first faced allegations of a multimillion-pound bribery scandal.

Astra is the latest British drug maker to become ensnared in a police investigation of sales in the fast-growing Chinese market, although the company said that the police who visited its Shanghai headquarters and took away an employee for questioning on Friday gave “no reason to believe it’s related to any other investigations”.

Astra said officials from the Shanghai Public Security Bureau, Huangpu branch, attended its offices “regarding a local police matter focused on a sales representative”.

The drug maker added that it was “committed to acting with integrity at all times and in all of our operations and interactions around the world”.

China is a crucial market for Astra, which has struggled with plunging revenues in its Western markets as key drugs fall out of patent. While its sales fell 15 per cent to $28bn (£18bn) last year, and profits before tax were down 35 per cent to $7.7bn, it enjoyed a 20 per cent increase in sales in China, which hit $1.3bn. It employs about 5,000 in the country and has spent the past two years building the most expensive factory it has ever built, costing $200m, in Jiangsu province.

Now Astra  has become the second Western big pharma company in as many weeks to have its sales team puts under the spotlight in China. Last week Gao Feng, the country’s head of economic crime investigation at the Ministry of Public Security, accused Glaxo of being a “criminal godfather” and “ringleader” in a bribery scandal involving payments of 3bn yuan (£320m) to doctors and hospitals over the past six years.

Police have arrested four GSK managers, put several more under house arrest, and banned the company’s finance director in China from leaving the country.

In a televised “confession” Liang Hong, GSK’s vice-president of operations in China, admitted bribery.

GSK is alleged to have worked with Chinese travel agencies to host conferences for as many as 2,000 people, with the events budgeted to cost more than 10m yuan. Glaxo executives are said to have inflated those costs, then creamed off some of the excess cash to pay bribes to doctors and middlemen.

Initially a Glaxo spokesman said the company had no idea why its Chinese offices were raided, and earlier this month said: “We’re still unclear about the precise nature of this investigation.”

But yesterday the company set out plans to slash drug prices in China and pledged to “root out corruption wherever it exists”.

Abbas Hussain, GSK’s head of emerging markets, who was sent over to China by the chief executive, Sir Andrew Witty, last week, held a meeting with the Ministry of Public Security. He said: “Certain senior executives of GSK China, who know our systems well, appear to have acted outside of our processes and controls, which breaches Chinese law.”

GlaxoSmithKline said it had been liaising with the UK’s Serious Fraud Office about the Chinese corruption claims, and Sir Andrew is expected to announce an “in-house” inquiry into the allegations at the drug maker’s results tomorrow.

Mr Hussain added yesterday that GSK was “taking this situation extremely seriously” and said the company had already decided on “proposed changes to our operational model [that would trigger] price reductions, ensuring our medicines are more affordable to Chinese patients”.

The investigation has widened beyond GSK, with the Belgian drug maker UCB saying last week that it had also been visited by Chinese authorities.

The New York Times also reported that it had seen documents showing that at least six other international pharmaceutical companies, including Merck, Novartis, Roche and Sanofi, had used the same travel agency as GSK to make bookings for events and conferences.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower