Monthly Archives: September 2013

Drug Companies Embroiled in Chinese Bribery Scandal

Glaxo-Smith-Kline and Novartis among those accused of bribery

The Chinese government is cracking down on large pharmaceutical companies accused of bribing Chinese doctors.  Unfortunately, doing business in China routinely involves bribery.  With doctors in metropolitan areas making only a few hundred dollars a month, the fact that they accept bribes is understandable.

On September 18, reports surfaced of monies being channeled from a fake clinical trial to bribes in the Alcon division of Novartis.  Allegedly, Alcon out sourced the trial to a third party who then paid doctors with “research payments”.  In addition to this misappropriation of funds, more cash earmarked for patient experience surveys was instead used to bribe doctors at more than 200 hospitals.

Alcon denies the allegations, stating that a 2012 internal audit found no wrong doings.

Besides Alcon, several other firms are accused of corruption in China.  A story on GlaxoSmithKline  broke in July according to the 21st Century Business Herald.  In August, a former Novartis employee claimed that she was encouraged to offer kickbacks to doctors who used the cancer drug Sandostatin LAR.

bribery common in China

Bribery is common in China, especially for underpaid doctors.

Another method of passing along the bribes was through the overbilling, or fictitious billing, for travel and conference services. Not just doctors, but hospital and government officials were also implicated.

Guilt by association:  other large pharma companies like Sanofi, Roche, and Novartis have also used Shanehai Linjiang, one of the travel agencies accused of being an intermediary.  Chinese authorizes have also visited Eli Lilly and Bayer.

Hence sales of pharmaceuticals in China have rapidly tapered off.  Companies under investigation in China dare not promote their products.  Other drug companies are also affected since Chinese doctors refuse to even meet with them.  Elsewhere, reports state that Glaxo is considering removing itself completely from the Chinese market; four Glaxo executives have been detained and its financial director banned from traveling.  While Glaxo has lowered drug prices to compensate for the alleged bribes, it is still facing an estimated decrease in Chinese profits of 30%.

Why crack down now on bribery?

Chinese regulators have been flexing their muscles beyond the drug industry.  Earlier this year they made tough conditions for a mining conglomerate to take over a national company.  Companies making liquid crystal display panels (LCD), including Samsung were hit by $57M in fines for price fixing.  Nestle and Apple are two more large names that have recently tangled with the Chinese government’s crackdown on corruption.

Secondly, there is a new focus on domestic consumption in China.  Consumers in country are more important than ever.   If one country needs more consumer protection, China is certainly it after a baby formula adulteration killed several infants.

To bring cost-effective healthcare to over a billion people, China needs to encourage the use of non-branded generic drugs.  China is a huge market, behind only the US and Japan on the total spent on medication.  Thus, large pharmaceutical companies need to learn how to adapt and grow in a different cultural environment.

DeeAnn Visk, Ph.D., is a freelance science writer, editor, and blogger. Her passions include cell culture, molecular biology, genetics, and microscopy. DeeAnn lives in the San Diego, California area with her husband, two kids, and two spoiled hens. You are welcome to contact her at deeann.v@cox.net

Novel Use of the Freedom of Information Act

To Gain Access to Confidential FDA Documents

 On August 6th of this year, the US District Court for Central California ruled that the FDA must give the AIDS Health Foundation (AHF) more information surrounding Gilead’s new AIDS prevention drug, Truvada. The AHF originally requested to see all documents pertaining to Gilead’s application for Truvada by filing a Freedom of Information request with the FDA.

Truvada, the drug in question, was fast tracked and approved by the FDA in July of last year as a preventative daily pill for those at high risk of contracting HIV.

Freedom of Information Act records requested by AHF

Searching for requested information

The AIDS Health Foundation contends that “the FDA improperly withheld safety and efficacy data and data summaries; correspondence with non-governmental entities; opinions of third parties; and internal agency documents not subject to the deliberative process exception…[the FDA] does not sufficiently describe or justify the withholding of these documents.”

The FDA does not argue that disclosure will impair its ability to obtain information from Gilead in the future. Instead, it asserts that Gilead will suffer substantial competitive harm if the records are disclosed.

AHF counters that the FDA has failed to show the records it withheld are “confidential” because it has not shown that there is actual competition in the market. Nor has the FDA shown that Gilead is likely to suffer “substantial competitive harm” from disclosure of the safety and efficacy records.

One wonders what the true motivation AHF has in seeking these records.  In the field of public health, controversy surrounds the idea of using a prophylactic drug to prevent HIV infection.  Conventional methods of using protection during sexual encounters also prevent pregnancy, and other sexually transmitted diseases.  Additionally, the HIV virus can develop resistance to Truvada if not taken consistently–a challenge for those in high risk groups.  Perhaps the goal of the Freedom of Information Act (FOIA) filing is merely to document these discussions between government agencies.  The FDA may find some of this material embarrassing, hence, they are claiming possible disclosure of material that will harm Gilead commercially.

Nonetheless, this novel use of the FOIA could possibly lead to a more sinister path:  endangerment of trade secrets for pharmaceutical companies.  Only time will tell, as the case continues through the courts.

The views expressed by DeeAnn Visk are solely her opinion, not those of her clients, NPR, WordPress, or your local public radio station.

DeeAnn Visk, Ph.D., is a freelance science writer, editor, and blogger. Her passions include cell culture, molecular biology, genetics, and microscopy. DeeAnn lives in the San Diego, California area with her husband, two kids, and two spoiled hens. You are welcome to contact her at deeann.v@cox.net