{"id":4561,"date":"2013-07-05T01:20:00","date_gmt":"2013-07-05T01:20:00","guid":{"rendered":"https:\/\/www.healthlawpolicymatters.com\/?p=4561"},"modified":"2021-11-03T01:21:13","modified_gmt":"2021-11-03T01:21:13","slug":"chinese-detain-pharmaceutical-company-managers-in-economic-crime-probe","status":"publish","type":"post","link":"https:\/\/www.healthlawpolicymatters.com\/2013\/07\/05\/chinese-detain-pharmaceutical-company-managers-in-economic-crime-probe\/","title":{"rendered":"Chinese Detain Pharmaceutical Company Managers in Economic Crime Probe"},"content":{"rendered":"\n

This week,\u00a0reports<\/a>\u00a0have arisen that Chinese authorities in the cities of Shanghai, Beijing, and Changsha detained high-level\u00a0GlaxoSmithKline<\/a>\u00a0(GSK) managers as part of an investigation into potential \u201ceconomic crimes.\u201d \u00a0\u00a0The detentions occurred two weeks after the\u00a0Wall Street Journal<\/a>\u00a0reported that a whistleblower claimed in a disclosure sent to the company\u2019s board that the sales staff in China had engaged in \u201cwidespread bribery of doctors\u201d to induce the prescription of GSK\u2019s drugs.<\/p>\n\n\n\n

GSK\u2019s international drug promotion activities have been under U.S. government scrutiny for quite a while. As\u00a0stated in a previous\u00a0article<\/a>, pharmaceutical and medical device companies have been the\u00a0focus of\u00a0a\u00a0U.S. Department of Justice<\/a>\u00a0(DOJ) and\u00a0U.S. Securities and Exchange Commission<\/a>\u00a0(SEC) Foreign Corrupt Practices Act (FCPA)\u00a0inquiry\u00a0<\/a>since 2010. \u00a0Because the DOJ and the SEC consider doctors who are employees of state-owned hospitals and health care organizations to be \u201cforeign officials\u201d under the FCPA, pharmaceutical and medical device companies are\u00a0particularly<\/em>\u00a0at risk for any direct or indirect sales or marketing activities directed\u00a0at these foreign doctors.\u00a0 Both agencies are also\u00a0focused on pharmaceutical companies conducting foreign clinical trials and potentially paying off third-party investigators to finesse research data.<\/p>\n\n\n\n

In June 2010, just two months after the DOJ and the SEC announced their pharmaceutical and medical device FCPA industry sweep, the Chinese Ministry of Health (MOH)\u00a0launched its own nationwide campaign\u00a0<\/a>against pharmaceutical industry corruption.\u00a0 The MOH established a \u201cblacklist\u201d of companies confirmed of paying commercial bribes in connection with the purchase and sale of pharmaceutical products.\u00a0 The MOH also mandated that local authorities severely punish doctors or other persons who are accepting bribes.\u00a0 And most recently the MOH has\u00a0taken steps<\/a>\u00a0to lower drug prices, make consultations more expensive, and\u00a0raise doctors\u2019 salaries to discourage corrupt activities resulting in the overprescribing of drugs and devices.\u00a0 These reforms are expected to be implemented\u00a0nationwide by 2015.<\/p>\n\n\n\n

Although the circumstances surrounding the Chinese government\u2019s recent arrest of GSK employees are not yet entirely clear, it provides some indication that the MOH\u2019s initiative announced in June 2010 was not merely a paper tiger. The arrests also provide further evidence that enforcement of anti-corruption laws is not limited to U.S. government actions.  Multinational companies operating on foreign soil should understand the potential consequences of alleged violations of foreign anti-bribery laws, regularly assess their risk profile, and update their compliance programs to account for local variations in enforcement standards.<\/p>\n","protected":false},"excerpt":{"rendered":"

This week,\u00a0reports\u00a0have arisen that Chinese authorities in the cities of Shanghai, Beijing, and Changsha detained high-level\u00a0GlaxoSmithKline\u00a0(GSK) managers as part of an investigation into potential \u201ceconomic crimes.\u201d \u00a0\u00a0The detentions occurred two weeks after the\u00a0Wall Street Journal\u00a0reported that a whistleblower claimed in a disclosure sent to the company\u2019s board that the sales staff in China had engaged … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_generate-full-width-content":"","footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/posts\/4561"}],"collection":[{"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/comments?post=4561"}],"version-history":[{"count":3,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/posts\/4561\/revisions"}],"predecessor-version":[{"id":4564,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/posts\/4561\/revisions\/4564"}],"wp:attachment":[{"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/media?parent=4561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/categories?post=4561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.healthlawpolicymatters.com\/wp-json\/wp\/v2\/tags?post=4561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}