Choking Down a Pill of a Chinese Po$t

The fact that anyone would suggest it is a shakedown is enough to make one gag:

"China accuses Glaxo of bribery operation" by David Barboza |  New York Times, July 16, 2013

SHANGHAI — Earlier this year, authorities here began looking into suspicious activity involving a Shanghai travel agency that was rumored to have huge revenue but few bookings.

What they uncovered, they said Monday, was a conspiracy involving tens of millions of dollars and directed by senior executives at the British drug giant GlaxoSmithKline.

Investigators said that for years, high-ranking executives at the company’s China operations worked with travel agencies to funnel bribes to doctors, hospitals, medical associations, foundations, and government officials.

The payoffs, investigators said, helped bolster drug sales and allowed GlaxoSmithKline to sell its products for higher prices in China.

I hate to be the one to inform you, but this is the way pre$cription pharmaceuticals operate across the globe. It's not about your health, it is about theirs and whatever pills they can hook you. The same corporations create the diseases and illnesses through their poisons and chemicals, and then they make profit off of sickness while their mouthpiece media covers it all up.

At a news conference in Beijing on Monday, authorities accused senior executives at the company’s China operations of organizing fictitious conferences, overbilling for training sessions, and accepting kickbacks in the form of cash and luxury travel. In some cases, authorities said, travel companies eager to sign long-term deals with the drug maker hired young women to engage in “sexual bribery” with GlaxoSmithKline managers.

“It’s like a criminal organization — there’s always a boss,” Gao Feng, head of the economic crime unit of the Chinese Ministry of Public Security, said at the news conference. “And in this case, GSK is the boss.”

We call him President of the United States.

The revelations came just days after the police announced that several company executives had confessed to engaging in bribery and tax fraud.

The possible punishments or fines for the drug maker are unclear, experts said, but the investigation is almost certain to cause concern among the ranks of major multinational companies operating in China.

On Monday, the government said four senior executives from GlaxoSmithKline’s China offices were being detained, including the head of the drug maker’s legal department, the head of business development, and two vice presidents. The four held are all Chinese nationals, police said.

Mark Reilly, head of GlaxoSmithKline’s operations in China and a British national, recently left the country, police said. The departure took place shortly after investigators raided the company’s offices.

What was Reilly running from?

“This is a very serious allegation, and the chief of China has left China,” Gao said.

The investigation is a huge embarrassment for the drug maker, which recently fired the head of its research and development department in Shanghai for misrepresenting data in a paper he co-wrote in 2010.

The company also said earlier that it had conducted an internal investigation into its China operations this year after a whistle-blower said bribery was used to bolster drug sales. The company said it found no evidence of wrongdoing or bribery in the China operation.

But on Monday, GlaxoSmithKline released a lengthy statement that expressed frustration.

“We are deeply concerned and disappointed by these serious allegations of fraudulent behavior and ethical misconduct by certain individuals at the company and third-party agencies,” the company said. “Such behavior would be a clear breach of GSK’s systems, governance procedures, values, and standards. GSK has zero tolerance for any behavior of this nature.”

The statement added: “GSK shares the desire of the Chinese authorities to root out corruption. These allegations are shameful and we regret this has occurred.”

The company said it would cooperate with the authorities and take immediate action to improve compliance procedures and end its dealings with travel agencies that might have committed fraud.

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"China bars Glaxo executive from leaving" by David Barboza |  New York Times, July 18, 2013

SHANGHAI — Chinese authorities have barred a British finance executive at the pharmaceutical giant GlaxoSmithKline PLC from leaving the country while they carry out an investigation into bribery and corruption at the British company, the company confirmed Wednesday.

Well, after the last guy split.... 

Steve Nechelput, the company’s vice president for finance in China, has not been detained or prevented from traveling or working in China, and there is no indication that he is the focus of the investigation. But a person involved in the case said he was being prevented from leaving the country and had sought the advice of British consular officials here.

The effort to restrict Nechelput’s travel came as the government ramped up an unusually bold anticorruption campaign against GlaxoSmithKline, one of the world’s biggest drug makers.

It is a corporate paper since it is so surprised at this.

On Monday, the government accused four senior executives from the China operations of Glaxo of using local travel agencies to bribe doctors, hospitals, medical associations, and government officials in an effort to bolster drug sales and get regulatory approvals.

The government said it had detained the four executives, all Chinese nationals, and that they had already confessed to engaging in a wide range of crimes, including bribery, embezzlement, and tax fraud.

On Tuesday, one of the detained executives, Liang Hong, appeared to confess to some of the fraud allegations during an interview on China Central Television, the nation’s biggest state-run broadcast network.

Although the government has filed no charges against the companies or the individuals, analysts said the government has been extraordinarily public about the case, offering details and strong denunciations, and going as far as saying the fraud allowed the drug maker to raise prices in China, defrauding consumers.

Authorities, however, rarely detain high-ranking foreign executives on bribery and corruption charges. Up to now, the government has not accused any of the company’s foreign executives of wrongdoing.

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"GlaxoSmithKline audit showed problems in China" by Katie Thomas |  New York Times, July 23, 2013

NEW YORK — Executives at British drug maker GlaxoSmithKline were warned nearly two years ago about critical problems with the way the company conducted research at its drug development center in China, exposing it to potential financial risk and regulatory action, an internal audit found.

The confidential document from November 2011, obtained by The New York Times, suggests that Glaxo’s problems may go beyond the sales practices that are at the center of a bribery and corruption scandal in China. They may extend to its Shanghai research and development center, which develops neurology drugs for Glaxo.

The failings, some experts said, underscore the problems that can arise when major drug companies export their scientific development to emerging markets like China.

Since 2006, 13 of the top 20 global drugmakers have set up research and development centers in China, according to a report by McKinsey & Co. “It’s cheaper to do research there,” said Eric G. Campbell, a professor of health care policy at Harvard Medical School. However, “I have absolutely no doubt that with cheaper research comes greater risk.”

In the case of Glaxo, auditors found that researchers did not report the results of animal studies in a drug that was being tested in humans, a breach that one medical ethicist described as a “mortal sin” in the world of drug research. They also concluded that workers at the research center did not properly monitor clinical trials and paid hospitals in ways that could be seen as bribery.

Last year, Glaxo said, a more favorable audit found the concerns had been addressed. But several outside experts said the problems outlined in the initial audit were grave and painted a picture of an organization that failed to keep tabs on a crucial research center as it expanded both in size and scope.

In a statement, Glaxo said it was committed to conducting “robust” audits of its business practices, and in this instance, “the process worked exactly as intended.” It added, “Patient safety is paramount and the audit reports do not show that this was compromised.”

The 2011 audit report also raised alarms about the way the Shanghai office was paying the people who were overseeing the company’s trials at outside hospitals or clinics. According to auditors, Glaxo was paying many sites a flat fee for the cost of a full-time coordinator, regardless of the number of participants enrolled in the trial.

Chinese investigators have said that Glaxo participated in a widespread bribery and corruption scheme in which the company used travel agencies to funnel illegal payments to doctors and government officials to bolster drug sales, and authorities have said they are also looking into the practices of other pharmaceutical companies.

It's $tandard operating procedure in the bu$ine$$ of medicine.

On Monday, Glaxo said some of its executives may have broken the law.

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"Glaxo Says Executives May Have Broken Chinese Law" by DAVID BARBOZA, July 22, 2013

SHANGHAI — The British pharmaceutical giant GlaxoSmithKline said Monday that some of its executives might have broken the law in China, the company’s strongest statement yet on a bribery and corruption scandal that has engulfed its China operations.

The statement, released after three top Glaxo executives met with Chinese investigators, came amid signs that other drug makers could also come under scrutiny from the Chinese authorities.

On Monday, the British-Swedish drug company AstraZeneca said one of its employees had been questioned by the police in Shanghai....

Related: AstraZeneca to add 80 jobs in Waltham

While they are cutting 1,200 in Delaware.

AstraZeneca to cut 2,300 sales jobs, narrow research focus

Getting out of China, which brings a question: with all the herbal remedies and acupuncture, why do the Chinese need prescription pharmaceuticals?

The Glaxo apology and statement that its executives may have broken the law is a sharp reversal for the company. A few weeks ago, executives at Glaxo said that this year they conducted an internal investigation into allegations of bribery and fraud in the China operations and found no evidence of wrongdoing....

Translation; That was a lie.

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"Glaxo CEO addresses China probe" by Katie Thomas |  New York Times, July 25, 2013

NEW YORK — GlaxoSmithKline’s chief executive, Andrew Witty, said Wednesday that the claims of bribery and corruption his company is facing in China are “deeply disappointing,” but he said the drug maker’s headquarters in London had not known of fraud and the executives under scrutiny in China were working “outside of our system of controls.”

It's the Constant Gardner in China!

The remarks, made during a conference call on the company’s second-quarter earnings, were the most extensive Witty has made about the scandal in China, where authorities have accused executives of using travel agencies to funnel illegal payments to doctors and government officials.

“I am very personally disappointed with these allegations that have been made,” Witty told reporters in London. “Clearly they are shameful allegations if they are true.”

He revealed few new details about the investigation, but said the company was working with the Chinese government and that it has “opened up channels” with the British and US governments. The company disclosed in 2010 that the United States was investigating Glaxo for possible violations of its overseas antibribery laws.

Whatever happened with that investigation anyway?

Witty said the ongoing Chinese investigation would be likely to affect sales in the country but that it was too early to know specifics.

$ee what is the worry?

Witty also sought to distance the company’s London headquarters from the scandal, saying the central office “knew nothing” about the alleged fraud and the executives accused of wrongdoing operated outside the company’s normal surveillance systems.

Who is in charge of the place, Sergeant Schultz?

Since taking over as chief executive in 2008, Witty has tried to promote the company as a leader in ethical and transparent behavior. In 2012, Glaxo agreed to pay a fine of $3 billion to settle charges in the United States that it had improperly promoted its antidepressants and failed to report safety data about the diabetes drug Avandia.

Related: Glaxo Gets Depressed 

Time to pop a pill then.

The company’s response to the current crisis has evolved considerably since reports of bribery first surfaced a few weeks ago. Glaxo officials initially stood by statements that the company had not engaged in wrongdoing, saying it had investigated the claims and found them to be without merit.

But it changed its tone after Chinese investigators raided company offices, detained four executives, and went public in unusual detail about the practices they had uncovered. Witty dispatched top management to China to meet with investigators, and he acknowledged some of the executives there may have broken the law.

Meanwhile, the inquiry has expanded to include other pharmaceutical companies. On Tuesday, AstraZeneca said some of its employees had been questioned in Shanghai, and Merck and Roche acknowledged over the weekend that they both had used the same small travel agency that has been implicated in the Glaxo investigation.

Related:

Roche abandons new diabetes drug
After setbacks, Merck will lay off 8,500 employees

Also see: 

Misogynist Merck
New Jersey Roaches 

Must be all the $ugar.

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"Police in China arrest British executive" New York Times Syndicate, August 22, 2013

SHANGHAI — Police in Shanghai have arrested a British investigator who specialized in advising foreign investors on fraud, cheating and other business risks in China, a spokeswoman for the British Embassy in Beijing said Wednesday.

The investigator, Peter Humphrey, has been held by the Shanghai police since early July. He is managing director of ChinaWhys, a risk management consulting firm that has done work for GlaxoSmithKline, the British pharmaceutical group that is facing graft and bribery allegations in China, raising speculation that his detention might be linked to that case.

A spokeswoman for the British Embassy, Hannah Oussedik, would say only that he had been formally arrested. “We can confirm the arrest of a British national, Peter Humphrey, in Shanghai, China, on Monday, 19th August,” Oussedik said in a brief telephone interview.

The Wall Street Journal, which first reported Humphrey’s arrest, said that his wife, Yu Yingzeng, was also formally arrested in Shanghai, and that the couple are both accused of illegally purchasing information about people. Oussedik could not confirm those details. Yu is a US citizen. US officials in Beijing and Shanghai declined to comment Wednesday.

One person who knows Humphrey and who asked not to be identified said he appears to have been arrested in connection with his work for GlaxoSmithKline.

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"US-British couple in custody apologizes on China TV; Charges related to crackdown on foreign firms" by Simon Denyer |  Washington Post, August 28, 2013

BEIJING — A British man and his American wife, detained last month for allegedly selling private information about Chinese citizens to foreign companies, were shown on state television in orange prison tunics Tuesday, offering a confession and an apology.

‘‘We obtained personal information, sometimes through illegal ways,’’ Peter Humphrey, 57, said in Chinese, sitting with his handcuffed hands just below his chin. ‘‘I am very regretful for this, and would like to apologize to the Chinese government.’’

I'll bet that was tough to get out.

The humiliating footage was the latest salvo against foreign business practices in China, which has cracked down this year on issues ranging from food safety to price fixing and poor customer service.

Some foreign business people complain they are being unfairly targeted, but the Chinese government insists it is merely protecting consumers and enforcing the law. 

It's about time the Chinese did that.

China’s official Xinhua News Agency said Humphrey and his wife, Yu Yingzeng, 60, were formally arrested Aug. 16. They are accused of operating illegal research companies and trafficking ‘‘a huge amount of personal information on Chinese citizens to seek profits.’’

The US and British embassies in Beijing said they were in contact with Yu and Humphrey, respectively, and would continue to provide them with consular assistance. Yu was born in China, but she earned a business degree in California and became an American citizen.

The couple runs a firm called ChinaWhys, an ‘‘international business-risk advisory service with eyes in China.’’ The company’s website says it promotes ‘‘transparency, ethical business practices, and international governance, to mitigate risk and reduce losses in multinational operations in China and across Asia.’’

They look like spies to me.

The business offers intelligence services to companies looking to do business with China, including ‘‘the vetting of partners and the screening of employees.’’ Yu, according to the website, is general manager of the firm and has spent the past 10 years as a fraud investigator in China.

China Central Television showed Yu and Humphrey, in handcuffs and wearing V-necked tunics, being escorted down a corridor by police officers, their faces blurred. Humphrey, a bespectacled, gray-haired former reporter for the Reuters news service, was then shown speaking to the camera.

Oh, man!

Shanghai police said the pair had traded personal information about Chinese citizens, including home addresses, the names of family members, exit-entry information, car ownership, and real estate details.

Of 500 company investigative reports seized by police, more than 10 were found to have infringed on Chinese citizens’ right of privacy, the Xinhua report said.

What is sad is it is more than you have here, Amurkn.

The information was sold to multinational companies, including manufacturing enterprises, financial institutions, and law firms, making profits running into millions of yuan annually, Xinhua reported (there are just over six yuan to the dollar).

Yu and Humphrey both confessed and apologized, the report quoted police as saying.

Lu Wei, an officer with the criminal investigation team of the Shanghai police, told CCTV the pair had registered their company in Hong Kong in 2003 but had no office or staff there. Rather, Lu said, the Hong Kong operation was a ‘‘shell company,’’ while the operation in China had more than 10 employees.

Ironically, consumers’ private information is routinely traded in China, while the government constantly monitors communications by citizens and foreigners. Still, police said they were merely applying the law in arresting the couple.

Ironically, it is the same in AmeriKa -- if not even worse!

‘‘The police will resolutely crack down on illegal activities made by either foreigners or Chinese,’’ Xinhua quoted the police as saying. ‘‘In accordance with the law, the Chinese government protects not only the vital interests of Chinese citizens but also the legitimate interest of foreign enterprises and foreigners in China.’’ 

I wish I had a government like that.

Last month’s detention of Yu and Humphrey came at the height of an investigation into British pharmaceutical group GlaxoSmithKline, which is accused of using bribes to expand its business operations in China.

ChinaWhys reportedly did work for GlaxoSmithKline. But Tuesday’s reports in the Chinese news media made no mention of the pharmaceutical company, and it remained unclear whether the two investigations were linked.

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Related:

"Report: Lilly paid kickbacks to Chinese doctors" by Tom Murphy |  Associated Press,  August 23, 2013

INDIANAPOLIS — Eli Lilly & Co. has spent millions of dollars on kickbacks to doctors in China for new patients who started using the drug maker’s insulin products, according to a report from a Chinese newspaper.

The 21st Century Business Herald reported that the Indianapolis company spent at least $4.9 million, in direct kickbacks to doctors. The paper cites a former Lilly executive it identified using the pseudonym Wang Wei.

A Lilly spokeswoman said in an e-mail that the company is ‘‘deeply concerned’’ about the allegations, and it is still investigating very similar accusations from a former sales manager that it learned about last year.

The company said it interviewed employees, audited expense reports and checked e-mails as part of an ‘‘exhaustive investigation’’ for any sign of kickbacks. Lilly said it has not been able to verify the allegations.

The newspaper reported that doctors received payments from Lilly representatives as high as $130 in some cases for each new patient. The doctors were asked to fill out cards on each patient after they prescribed the medication. Lilly representatives then collected the cards and paid the doctors, the paper said.

The paper also reported that Lilly representatives were evaluated on the number of returned cards. Those with the highest totals received rewards. Reps who failed to meet set totals were eliminated from the team.

The paper said documents it obtained provided by the source showed that Lilly made the payments in 2011 and planned to do so last year as well.

Insulin is used to treat diabetes, a chronic condition in which the body either does not make enough insulin to break down the sugar in foods or uses insulin inefficiently. Over time, diabetics are at higher risk for heart attacks, kidney problems, blindness, and other serious complications.

Lilly has made a big push to expand its presence in China, in part to provide treatments for diabetes, a disease that has grown rapidly in recent years. In late 2010, it announced that it would open a diabetes research center in China to develop treatments.

Chinese authorities have been cracking down on pharmaceutical misconduct. They’ve launched an investigation against French drug maker Sanofi after the state-owned 21st Century Business Herald also reported that an unnamed whistle-blower said Sanofi paid 503 doctors a total of $274,000 to prescribe Sanofi products. The paper said the payments were disguised as grants for research programs.

Gee, the Chinese are taking on them all!

Government officials also detained last month some employees of British pharmaceutical company GlaxoSmithKline on bribery suspicions.

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.

And we have Obamacare coming!

Late last year, Lilly agreed to pay $29.4 million to resolve federal allegations of possible corrupt business practices by the company’s overseas partners. The settlement dealt with a Securities and Exchange Commission investigation launched in 2003 of four Lilly affiliates in Brazil, China, Poland, and Russia.

Yup, everything is all $ettled in the U.S. so let's get back to bu$ine$$.

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