Chinese authorities probe Bayer for pricing corruption

Reuters, SHANGHAI, China

Sat, Sep 14, 2013 - Page 15

Chinese authorities visited a local office of German drug maker Bayer AG late last month to investigate a potential case of unfair competition, the company said yesterday.

China’s regulators have been probing numerous international and Chinese drugs firms, with investigations into the pharmaceutical sector spanning alleged corruption in drug pricing.

It was working with Chinese authorities, led by a local branch of China’s State Administration for Industry and Commerce (SAIC), but did not expand on the status of the probe, Bayer said.

“We are taking the investigation seriously and are fully cooperating with the authority,” Bayer said in an e-mailed statement.

The SAIC is one of China’s three anti-trust regulators. It handles non-price related anti-competition issues and commercial bribery.

The most high-profile investigation into corruption in the pharmaceutical sector in China involves British drug maker GlaxoSmithKline (GSK).

Police have detained four Chinese executives from GSK over allegations it funneled up to 3 billion yuan (US$490.36 million) to travel agencies to facilitate bribes to doctors to boost the sale of its medicines. GSK has said some of its senior Chinese executives appear to have broken the law.

Bayer employs about 11,000 people in China and gets a quarter of its global revenue from the Asia-Pacific region.

“In case of allegations or non-observance of the Bayer Corporate Compliance Policy by employees, Bayer will investigate them thoroughly and take full responsibility for appropriate measures,” the Bayer statement said.

Corruption in China’s pharmaceutical industry is widespread, fueled in part by low base salaries for doctors at the country’s 13,500 public hospitals.