Eli Lilly, a big provider of drugs around the world, has become the latest Western pharmaceutical group embroiled in allegations of malpractice in China.
The US company said it was “deeply concerned” about claims it paid 30 million yuan (US$4.9 million) to doctors to prescribe its diabetic treatments in Shanghai.
GlaxoSmithKline (GSK), Britain’s largest drug company, has seen four of its Chinese executives arrested over bribery allegations and a British consultant who worked for GSK was formally arrested this week.
The allegations against Eli Lilly were made by a former Chinese sales manager for Eli Lilly in China’s 21st Century Business Herald newspaper, prompting the company to admit that it was aware of similar allegations made last year by a former sales manager in the same region.
“At the time of the allegations [last year], we did an exhaustive investigation to search for any evidence of kickbacks,” a company spokesman said.
“The investigation was very thorough and included employee interviews, e-mail monitoring and expense report audits. Although we have not been able to verify these allegations, we take them seriously, and are continuing our investigation,” he said.
The Herald quoted a former Eli Lilly manager as saying “in order to hit sales at rival companies and push the company’s own products, bribes and special payments of all sorts were extremely common at the company.”
Last week the newspaper quoted an unnamed whistleblower as saying that a third drug company, Novartis AG of Switzerland, had paid bribes to doctors to boost drug sales, triggering an internal investigation by that business.
Allegations have also been made against Sanofi of France.
Eli Lilly paid US$29 million to the US authorities last year to settle claims of corrupt practices that included allegations related to China.
These included allegations that it falsified expenses in China between 2006 and 2009 that it allowed its sales representatives to provide gifts and hospitality.
Corruption is believed to be widespread in China, partly due to the very low base salaries paid to the country’s doctors.