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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness