Roche con­firms visit to of­fice by in­ves­ti­ga­tors

China Daily (Canada) - - BUSINESS - By YAOJING yaojing@chi­

For­eign drug­mak­ers may face more scru­tiny of their op­er­a­tions in the Chi­nese mar­ket af­ter Switzer­land­based phar­ma­ceu­ti­cal com­pany Roche Hold­ing AG said lo­cal au­thor­i­ties called on its of­fices in Hangzhou, Zhe­jiang prov­ince, on Wed­nes­day.

“We are aware that lo­cal govern­ment au­thor­i­ties vis­ited Roche’s of­fice in Hangzhou on May 21, and the de­tails of the visit are not clear,” Roche’s com­mu­ni­ca­tions depart­ment in Shang­hai said in an e-mail state­ment on Thurs­day.

“We will fully co­op­er­ate with the au­thor­i­ties in­volv­ing any in­quiries,” the state­ment said.

The com­pany's Bei­jing of­fice is re­port­edly un­der in­ves­ti­ga­tion, ac­cord­ing to news por­tal

Bao Lei, Roche’s Shang­haibased di­rec­tor of com­mu­ni­ca­tions, de­nied the re­port when con­tacted by tele­phone.

On May 14, an ex­ec­u­tive at Bri­tish drug­maker Glax­oSmithK­line Plc was charged with leading a net­work to bribe doc­tors and hos­pi­tals to use the com­pany's drugs.

The Chi­nese govern­ment ini­ti­ated an anti-cor­rup­tion cam­paign for the med­i­cal in­dus­try last July af­ter con­duct­ing a bribery in­ves­ti­ga­tion into GSK.

The scan­dal widened across the in­dus­try, with other multi­na­tional phar­ma­ceu­ti­cal com­pa­nies also fac­ing scru­tiny in China over claims they bribed med­i­cal staff to pre­scribe their prod­ucts.

Roche said the com­pany was not un­der govern­ment scru­tiny at that time.

Com­ment­ing on the lat­est visit, Bruce Liu, an in­dus­try vet­eran, said it wasn’t en­tirely un­ex­pected, given that many drug com­pa­nies faced probes last year.

“What is a bit sur­pris­ing, though, is the harsh­ness of re­cent al­le­ga­tions and ac­tions against what had been widely per­ceived as the ‘car­di­nal sin’ in the in­dus­try,” Liu added.

Against this back­drop, and with un­cer­tainty over reg­u­la­tory de­vel­op­ments, some drug com­pa­nies have started to shift away from tra­di­tional sales prac­tices.

GSK said at the end of 2013 that it will no longer com­pen­sate its Chi­nese sales rep­re­sen­ta­tives based on sales vol­ume.

“I be­lieve that pa­tients and pa­tient groups, pay­ers and dis­ease man­age­ment plat­forms are among the in­creas­ingly im­por­tant stake­hold­ers to en­gage go­ing for­ward. It will al­ways take in­vest­ments, ef­forts and courage to break out of the mold, but that has be­come an im­per­a­tive to stay away from the sys­temic risks,” said Liu.

Roche, the world's largest maker of cancer drugs, said it had seen con­tin­ued strong growthinChina in re­cent years.

In 2013, the com­pany’s key emerg­ing mar­kets showed growth of 12 per­cent, boosted by 21 per­cent sales growth in China. Di­ag­nos­tics sales grew 4 per­cent, con­sol­i­dat­ing the di­vi­sion’s leading mar­ket po­si­tion, ac­cord­ing to its fi­nan­cial re­port.

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