After GSK, Bayer Also Targeted in Chinese Pharmaceutical Probe

September 12, 2013

12 Sept (CHINA INSIDER) – The German pharmaceutical conglomerate Bayer has become the latest target of an ongoing investigation in China into malpractice in the industry.  China’s Federation of Industry and Commerce contacted a Bayer office in China in relation to an investigation into anti-trust offences, Bayer’s spokesman Guenter Forneck told the South China Morning Post in an emailed statement.

“We assume that this contact is related to a wider investigation into the pharmaceutical industry in China,” he wrote.

001fd04cea510cccbc250bThe German company is the latest pharmaceutical giant to be tied to an investigation that first came to light two months ago with the announcement by police in Changsha, Hunan province, of a probe into alleged “economic crimes” by employees of the British drug firm GlaxoSmithKline. US firm Eli Lilly, the French firm Sanofi, the Danish firms Novo Nordisk and H Lundbeck, the British firm AstraZeneca and the Belgian firm UCB have also said they have been contacted by Chinese investigators.  In July, the National Development and Reform Commission said it was extending the probe to cover 60 international and domestic drug makers.

Chinese health officials have highlighted rampant corruption in the Chinese health sector leading to higher costs for patients. The investigation is aimed at eroding illicit practises among suppliers of pharmaceutical products in China as part of a wider series of measures aimed at reforming the country’s struggling public health care system.

Bayer was co-operating with Chinese authorities in the investigation, according to a company statement. The company had strict compliance regulations in place and encouraged its employees to report violations of its regulations, it said, adding that it would look into allegations of misconduct and take measures accordingly.

The Chinese market is becoming increasingly important to the conglomerate, which celebrated the 150th anniversary of its founding last month and has a market capitalisation of US$92.7 billion. In the last fiscal year, Bayer’s China revenue was US$3.1 billion, 19.5 per cent of its global total, up from 17.7 per cent a year earlier.

Last week, the European Union Chamber of Commerce in China’s pharmaceutical working group said the industry-wide probe was “unfair” in overly targeting foreign enterprises.