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China anti-graft watchdog visits Roche amid pharma crackdown
May 22, 2014 / 7:31 AM / in 4 years

China anti-graft watchdog visits Roche amid pharma crackdown

SHANGHAI/ZURICH (Reuters) - Swiss drugmaker Roche Holding AG said it had been visited by a unit of China’s anti-trust regulator - a move that comes amid a widening crackdown on corruption and high prices in the country’s pharmaceutical sector.

However, it was not immediately clear what was behind the visit.

Roche said its offices in the eastern city of Hangzhou had been visited by a unit of the State Administration for Industry and Commerce (SAIC). The SAIC usually takes the lead in cases of bribery and corruption.

“We understand that a local government unit in Hangzhou visited Roche’s offices on May 21, but the specific details are not yet clear. We will cooperate fully with the work of the relevant government department,” Roche said in a statement emailed to Reuters on Thursday.

The SAIC did not respond to repeated requests for comment and clarification on the case.

Roche’s shares were down 0.6 percent in early trade.

Last week Chinese authorities charged executives at British drugmaker GlaxoSmithKline over bribery and corruption, and legal and industry sources have said the crackdown on the pharmaceuticals sector is likely to intensify.

“More and more firms have been visited by the SAIC in the wake of the GSK case,” John Huang, Shanghai-based managing partner at law firm MWE China, told Reuters.

In 2013, Chinese authorities visited large international drugs manufacturers that included Novartis AG, AstraZeneca Plc, Sanofi SA, Eli Lilly & Co and Bayer AG as part of a broad investigation into the sector.


China has become a magnet for global drugmakers and medical device markets, with its pharmaceutical market set to become the world’s second-biggest behind the United States within three years according to consultancy IMS Health.

It is a key growth market for Roche, with sales of its drugs in the country rising by 21 percent last year. Roche, which is the world’s largest maker of cancer drugs, does not give absolute sales numbers for China.

A corruption probe in China can have a serious impact. Official Chinese media said on Friday that GSK might have suffered “irreparable damage” in the Chinese market from the probe, and that the charge was a warning to other foreign firms in the country.

GSK’s revenues in the country plunged 61 percent in the third quarter last year and were down 20 percent in the first quarter of 2014 from a year earlier.

The British drugmaker has said it wants “to reach a resolution that will enable the company to continue to make an important contribution to the health and welfare of China and its citizens”.

Corruption is rife in China’s healthcare sector, driven by high targets for sales staff and low salaries for doctors. Lawyers have estimated around half of all pharmaceutical firms in China were being probed in some capacity.

Reporting by Adam Jourdan in SHANGHAI and Caroline Copley in ZURICH; Editing by Kazunori Takada and Edwina Gibbs

Our Standards:The Thomson Reuters Trust Principles.
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