Novartis Accused of Paying China Doctors Kickbacks, Herald Says

A woman who sold a cancer drug in China for Novartis AG (NOVN) said she was asked to give doctors kickbacks in return for sales of the medicine, the 21st Century Business Herald reported.

The woman, identified by the pseudonym Li Li, said her manager told her to spend 50,000 yuan ($8,170) to sell 50 doses of the Sandostatin LAR stomach cancer medication, the according to a report yesterday from the newspaper, which is based in the southern Chinese city of Guangzhou.

Cindy Min, head of communications at Novartis China, said by e-mail that she couldn’t immediately comment on the report. Novartis, in a response given to the Business Herald, said Li Li had asked the drugmaker for a payment of 5 million yuan in July, saying she’d take unspecified actions if the money wasn’t given to her, the newspaper reported.

Novartis is the second drugmaker this month to have allegations against it published by the Business Herald. In an Aug. 8 article, a whistle-blower accused Sanofi (SAN) of paying bribes to doctors, with the official Xinhua News Agency reporting two days later that China’s drugs regulator called for a probe of the company. Police are also investigating GlaxoSmithKline Plc (GSK) for suspected bribery as authorities increase their scrutiny of the health industry.

China will start a campaign tomorrow to crack down on illegal competition nationwide including “commercial bribery” for drug sales and medical services, the official Xinhua News Agency reported today, citing the State Administration for Industry and Commerce.

Li Li told the Business Herald that she joined Novartis in January this year and handled sales of Sandostatin in northern China, according to the report. The labor dispute arbitration committee of Beijing’s Chaoyang district received her letter seeking to void her employment contract with Novartis on Aug. 5, the newspaper reported.

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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