4 drug firms linked to agency in probe

Glaxo SmithKline P.L.C. and others worked with a travel agency under investigation by Chinese authorities.
Glaxo SmithKline P.L.C. and others worked with a travel agency under investigation by Chinese authorities. (AP)
Posted: July 24, 2013

Sanofi, Novartis AG, Merck & Co., and Roche Holding AG worked with the same travel agency under investigation by Chinese authorities as part of a probe of GlaxoSmithKline P.L.C. over allegations of bribery and corruption.

Sanofi, based in Paris, and Roche and Novartis, of Basel, Switzerland, stopped using the travel agency, called Shanghai Linjiang, once the allegations of wrongdoing surfaced, the three drugmakers said Monday. Merck also has stopped doing business with the agency, a spokeswoman said.

Separately, AstraZeneca P.L.C. said that police had visited its offices in Shanghai related to "a local police matter focused on a sales representative" and that there was no reason to believe the case is related to any other probes.

Glaxo's head of emerging markets said Monday after meeting with government officials in Beijing that some employees may have broken China's laws and pledged corporate changes that will deliver cheaper medicines. Glaxo faces allegations of economic crimes involving three billion yuan ($489 million) of spurious travel and meeting expenses as well as trade in sexual favors, the ministry said last week.

"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," Abbas Hussain, the Glaxo executive who was sent to China to help with the probe, said in a statement after a "very constructive meeting" with officials from the Ministry of Public Security. "We have zero tolerance for any behavior of this nature."

The London-based company, which made about one billion pounds ($1.5 billion) of revenue in China last year, had said in June that it found "no evidence of corruption or bribery" there after a four-month internal investigation.

"AstraZeneca adheres to high ethical standards in the pharmaceutical industry, and does not tolerate any illegal or unethical conduct in our business activities," that company said. "All AstraZeneca China employees and third parties on AstraZeneca's behalf are required to strictly comply with these guidelines in the conduct of business."

All drugmakers are receiving visits to their Chinese operations, according to UCB SA, the Belgian drugmaker that said last week that authorities came to its offices in the country.

Merck used the Shanghai Linjiang travel agency "in the past, but no longer does so," Kelley Dougherty, a spokeswoman for the Whitehouse Station, N.J.-based drugmaker, said Monday.

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