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China may be trying to ‘frighten’ pharma

Published on 06/09/13 at 09:27am
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Western pharma companies caught up in Chinese probes over corruption are being discriminated against, according to a European business lobby organisation.

“The question we ask today is if this campaign is aimed just to frighten some companies or create a special climate,” said Bruno Gensburger, chair of the European Union Chamber of Commerce in China’s pharma working group. “I don’t think it will solve anything.”

GlaxoSmithKline is the subject of the highest profile investigation into bribery in China, although Sanofi also faces allegations in that area and other pharma firms are under the microscope in the country on issues such as drug pricing.

In a briefing quoted by Reuters, Gensburger said that all firms have fully co-operated with the authorities. “We all want to work in a very clean environment,” he said.

“What I feel is a little bit unfair is that the foreign companies which are most serious about SOPs [standard operating procedures] have been the most investigated and the most discriminated,” he went on. “To my knowledge today, no Chinese company has been investigated.”

High drug prices are a major issue in China as some of its medicines have price tags 30% - 40% higher than those in the West.

To help combat this, the National Development and Reform Commission is conducting an industry-wide inquiry into the pricing of medicines, and can impose hefty civil penalties on companies that violate China’s 2008 anti-monopoly law.

But the European lobby group says China needs to tread carefully if it wants to get the benefits of free market economics, and believes the country’s government is ‘overly-dominant’.

“China’s leaders have already identified a better use of market forces as the catalyst to transform China’s economy,” said European Chamber president Davide Cucino.

“Liberalisation has stalled and domestic companies - in particular state-owned enterprises -continue to receive partisan treatment,” he went on.

The government has to strengthen its own role as a regulator, but for economic reform to work properly it must step back from the business envioronment, the chamber believes.

“This is a difficult and daunting process, but market forces can only be strengthened if the government steps back from its current overly-dominant role,” Cucino continued.

Adam Hill

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