SHANGHAI May 27 China's eastern city of
Hangzhou is cracking down on graft in the healthcare sector,
according to an internal memo from the local government, putting
more pressure on global drugmakers operating in the country.
Earlier this month, China charged executives at British
drugmaker GlaxoSmithKline Plc with corruption. GSK said
it was cooperating with the authorities.
Swiss drugmaker Roche Holding AG last week said it
was cooperating with authorities after China's anti-graft
watchdog visited its Hangzhou offices.
The Hangzhou crackdown is another sign that Chinese
authorities are getting increasingly active in the fight against
graft in the country's healthcare sector, a concern for
drugmakers and medical device firms looking to target the
country's near 1.4 billion population.
Industry and legal sources told Reuters that probes into the
sector were likely to rise in the wake of the investigation
against GSK, putting increasing downward pressure on profits and
The city's health bureau has ordered healthcare departments
to carry out internal compliance probes before the end of June
and to report any kickbacks they had received, the 21st Century
Business Herald newspaper reported on Tuesday, citing the
internal document from the ministry.
An official at the Hangzhou Health Bureau told Reuters that
the document existed, but declined to elaborate further saying
it was meant to be an internal notification.
The health bureau memo named Britain's AstraZeneca Plc
, U.S.-based Eli Lilly and Co and Denmark's Novo
Nordisk A/S as examples of drugmakers suspected of
making kickbacks, the 21st Century Business Herald reported. The
health bureau official declined to comment.
A Denmark-based spokesman for Novo Nordisk said that he
couldn't comment directly on internal documents, but that the
firm fully supported the Chinese government's work.
"Investigations by various authorities are not uncommon in
China, nor are they a new phenomenon, and like many other
companies Novo Nordisk receives inspections from time to time,"
the spokesman said.
An AstraZeneca spokeswoman said the firm was aware of the
media reports but had not received any "official communication"
on the matter from Chinese authorities.
"AZ China cooperates with various Chinese authorities on a
regular basis across a wide range of interactions," she said.
Eli Lilly said it had not been contacted by the authorities
in China over the matter.
"Lilly has not been contacted by Hangzhou Health Bureau. We
fully cooperate with any inquiries we receive from government
and its agencies in China," a China-based spokeswoman said.
Last year Chinese authorities visited global drugmakers
including Novo Nordisk, Novartis AG, AstraZeneca,
Sanofi SA, Eli Lilly and Bayer AG as part
of a broad investigation into the sector.
(Additional reporting by SHANGHAI newsroom; Editing by Erica