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Bayer AG comes under investigation in China

September 13, 2013

BEIJING (AP) — The pharmaceutical giant Bayer AG confirmed Friday that it is being investigated in China for possible unfair competition, making it the latest foreign drug maker to come under scrutiny in the country.

The Germany-based company said it is cooperating with Chinese authorities in the investigation after industry and commerce regulators visited a Bayer office at the end of August. It did not provide further details of the case or say where the office was, but said it would investigate any allegations thoroughly and take proper action.

“In China as in other regions around the globe, it is our responsibility to base our business models on absolute integrity,” it said in a statement. “At Bayer we have very strict compliance rules in place, which clearly forbid incompliant behavior of our employees.”

A wave of investigations has rattled foreign drug manufacturers in China. Authorities are probing whether British-based GlaxoSmithKline PLC and French rival Sanofi SA paid doctors to encourage the use of their medications. GSK employees are also accused of laundering money through travel agencies to evade its internal anti-bribery controls.

Chinese media reports say U.S.-based Eli Lilly and Co. spent millions of dollars on payments to Chinese doctors to prescribe its insulin products.

In China’s health system, low salaries and skimpy budgets drive doctors, nurses and administrators to make ends meet by accepting money from patients, drug suppliers and others. The practice has long been common knowledge.

Bruno Gensberger, president of the European Chamber of Commerce’s pharmaceutical working group, has said the investigations have only targeted foreign companies, including those with the strongest standard operating procedures, or SOPs, to prevent employee misconduct.

“The foreign companies that are most serious about SOPs have been the most investigated and the most discriminated,” Gensberger said last week. “To my knowledge, today no Chinese company has been investigated.”