anti-graft watchdog visits Roche amid pharma crackdown
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[May 22, 2014]
By Adam Jourdan and
SHANGHAI/ZURICH (Reuters) -
Swiss drugmaker Roche Holding AG said it had been
visited by a unit of China's anti-trust regulator, apart
of a widening crackdown on corruption and high prices in
the country's pharmaceutical sector.
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
"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
A spokeswoman for the local office of the SAIC told Reuters the
visit was for a range of issues, but declined to elaborate. She said
the office had yet to reach a conclusion about the issue.
Roche's shares were trading down 0.5 percent at 264.7 francs by 1019
GMT compared to a 0.4 percent weaker European healthcare sector
Last week Chinese authorities charged executives at British
drugmaker GlaxoSmithKline <GSK.L> 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 drug
manufacturers that included Novartis AG <NOVN.VX>, AstraZeneca Plc <AZN.L>,
Sanofi SA <SASY.PA>, Eli Lilly & Co <LLY.N> and Bayer AG <BAYGn.DE>
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; sales of its drugs in the
country rose by 21 percent last year. Roche, which is the world's
largest maker of cancer drugs, does not give absolute sales numbers
[to top of second column]
A corruption inquiry 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 investigation,
and that the charge was a warning to other foreign firms in the
GSK's revenues in China plunged 61 percent in the third quarter last
year and were down 20 percent in the first quarter of 2014 from a
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 that around half of all pharmaceutical firms in China were
being investigated in some capacity.
(Reporting by Adam Jourdan in SHANGHAI and Caroline Copley in
ZURICH; Editing by Kazunori Takada and Edwina Gibbs)
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