A Chinese regulator investigated Siemens AG last year over whether the German group’s healthcare unit and its dealers bribed hospitals in China to buy expensive disposable products used in some of its medical devices, three people with knowledge of the probe told reporters.
The investigation, which has not previously been reported, follows a wide-reaching probe into the pharmaceutical industry in China that last year saw GlaxoSmithKline PLC fined nearly US$500 million for bribing officials to push its medicine sales.
China’s State Administration for Industry and Commerce (SAIC) accused Siemens and its dealers of having violated competition law by donating medical devices in return for agreements to exclusively buy the chemical reagents needed to run the machines from Siemens, the people said.
Reuters was unable to determine whether Siemens had denied the accusations or if any action was taken against the company or the dealers.
Siemens spokesman Matthias Kraemer said in Germany that he was “not aware” of the investigation and declined to comment on specific questions about the investigation.
“We are not aware of any situation that conforms to what you describe,” Kraemer said in response to questions e-mailed to Siemens in China and to the group’s headquarters.
He declined to comment further. The SAIC declined to comment.
China-based lawyers said it was not uncommon for regulators to conduct investigations behind closed doors and for legal teams to then negotiate settlements to keep probes under wraps.
The Siemens investigation, which involved as many as 1,000 hospitals, could signal further probes into other medical device makers, one of the sources said. It comes as Beijing pushes hospitals to use more locally-made medical devices and reduce a reliance on imports that account for three-quarters of a Chinese market worth about US$34 billion.
Other foreign medical device firms operating in China include General Electric, Koninklijke Philips, Medtronic and Johnson & Johnson.
The SAIC accused Siemens and its dealers of having committed “commercial bribery” under Article 8 of China’s Anti-Unfair Competition Law, the sources said, and the regulator took a tough line on a practice that, while technically illegal, is relatively common in China’s healthcare sector.
Chinese medical institutions are prohibited from accepting donations under conditions that impede fair competition or otherwise affect procurement decisions, according to China’s National Health and Family Planning Commission.
The three people, two of whom have direct knowledge of the investigation, asked not to be named. The third works closely with Siemens’ healthcare team in China and was briefed on the investigation.
Medical device makers work closely with their dealers, and contracts to sell equipment to hospitals are usually signed by both the manufacturer and the distributor. The Siemens investigation involved a range of medical devices, including those used to carry out blood tests, the sources said.
Reporters were unable to ascertain which dealers were involved.
Siemens saw China sales of 6.44 billion euros (US$7.21 billion) last year, around 8 percent of its total sales. It employs 32,250 people in China, where it also has units operating in sectors from railways to energy.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by