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
Barn owls are among species that could be affected
charity appeal
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
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

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

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas