Jan 1, 1970 - Jan 1, 1970,

AstraZeneca Increases Chinese Investment Despite Industry Scrutiny

AstraZeneca (AZ) is adding to its investment in China, where sales showed a 21 percent increase in the second quarter, all while Chinese government continues its crackdown on corruption in the healthcare industry.



The UK’s second largest pharmaceutical company has increased its sales force in China to keep up with the expansion of medical coverage in the country, even as prices fall, AZ CEO Pascal Soriot has confirmed. Soriot said during a media conference call that pursuing growth in emerging markets was part of the company’s strategy to balance the market share lost to competition from generic medicines. The 21% increase in sales in China accounted for nearly half of a 12% overall gain in the company’s emerging market sales, and Soriot remarked that all the company’s products had seen increased sales.

Chinese authorities are currently investigating the UK’s largest drugs firm, GlaxoSmithKline (GSK), over a corruption scandal where senior Chinese GSK execs channelled up to 3 billion yuan (US$489 million) through travel agencies in order to facilitate bribes to doctors and health officials. GSK has since promised that it will lower the cost of its medicines in China in an attempt to redress the situation, and it is possible that the Chinese government is using the threat of investigations as a lever to get other foreign companies to lower their drug prices; both Sanofi and Eli Lilly & Co. reported yesterday that they had also received visits from Chinese regulators.

Earlier this month the European food companies Nestle and Danone lowered infant milk formula prices in China after an investigation into possible corruption and price-fixing in that sector. “We must resolutely punish illegal acts, expose illegal enterprises, recall problematic products,” Wu Zhen, the Chinese State Food and Drug Administration’s deputy commissioner, said in a statement.

Soriot mentioned that an AstraZeneca sales representative is being detained in Shanghai while police investigate an individual case. “Our organization in China is very focused on doing business in China the right way,” Soriot commented. “Our focus is on science and developing medicines that help patients. There are 1.2 billion patients in China, so we are very focused on growing in China.” He said no charges had been brought against the sales representative, and that AstraZeneca did not believe that the investigation would expand. Soriot also said that two other employees had been brought in for questioning regarding the case, but that they had since been released, and that a recent internal investigation into the company’s Chinese division hadn’t uncovered any evidence of wrongdoing.



Jan 1, 1970 - Jan 1, 1970,