GSK officer barred from leaving China amid probe

AP, BEIJING

Fri, Jul 19, 2013 - Page 15

Drug manufacturer GlaxoSmithKline (GSK), which is under investigation on suspicion that its employees bribed Chinese doctors, yesterday said the finance director for its local unit has been barred from leaving China.

Finance director Steve Nechelput has not been questioned or arrested and is free to travel within China, the British company said in a statement. It said it had been aware of the travel restrictions since the end of last month. Nechelput continues to work in his role as finance director for the company’s China unit.

Chinese police announced this week that they detained four GSK employees on suspicion of paying bribes to doctors, hospitals and others to encourage them to prescribe the company’s medications.

Police say the employees funneled as much as 3 billion yuan (US$490 million) through travel agencies and consulting firms to hide the source of bribes, according to Chinese news reports. Investigators have not said how much of that money was paid as bribes.

Xinhua news agency said the scheme appeared to be aimed at evading GSK’s internal controls meant to prevent bribery.

GSK has said it opposes bribery and was cooperating with the investigation.

On Wednesday, the Chinese State Food and Drug Administration launched a crackdown on misconduct in its pharmaceutical market, though it gave no indication it was linked to the GSK probe.

The drug regulator said the campaign is aimed at stamping out unauthorized drug production, improper online drug retailing and sales of fake traditional Chinese medicines.

The new Chinese leadership that took power in November last year has promised to improve China’s health system and rein in surging costs of medicine and medical care that are fueling public frustration.

China has suffered repeated scandals over fake or shoddy medications, some of which caused deaths and injuries. Regulators have launched repeated crackdowns on false advertising and other violations, but with limited success.

Also on Wednesday, a Chinese Ministry of Commerce spokesman warned that Chinese and foreign drug manufacturers would face “legal sanctions” for misconduct.

Meanwhile, the Cabinet’s planning agency is investigating production costs at 60 Chinese and foreign pharmaceutical manufacturers, according to state media, possibly a prelude to revising state-imposed price caps on key medications.