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TheStreet Open House

China Probes Sanofi for Alleged Bribery

BEIJING -- Chinese authorities have launched an investigation against French drugmaker Sanofi (SNY) following a news report that accused the company of bribing hundreds of Chinese doctors in 2007.

An unnamed whistleblower told the Guangzhou-based, state-owned 21st Century Business Herald that the French company had paid 503 doctors a total of $274,000 to prescribe Sanofi products, disguising the payments as grants for research programs.

China's official Xinhua News Agency said Saturday that the Beijing municipal health bureau was teaming up with disciplinary authorities to look into the research programs and determine whether the payments were actually bribes.

Sanofi did not immediately respond to a request for comment.

According to the 21st Century Business Herald report, Sanofi said it took the claim "very seriously" and had started to investigate the allegations.

The investigation of Sanofi comes amid a crackdown by China's drug regulator on misconduct in the country's pharmaceutical market.

Last month, Chinese police detained four employees of British pharmaceutical manufacturer GlaxoSmithKline (GSK) on suspicion of paying bribes to doctors and hospitals to encourage them to prescribe medications.

In China's dysfunctional 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.

Meanwhile, the Cabinet's planning agency is investigating production costs at 60 Chinese and foreign pharmaceutical manufacturers, according to state media, possible as a prelude to revising state-imposed price caps on key medications.

In the baby formula market, the government has fined six milk suppliers, including Mead Johnson (MJN) and New Zealand's Fonterra, a total of $108 million for price-fixing after an investigation that shook the country's fast-growing dairy market.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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