Roche confirms visit to office by investigators

Foreign drugmakers may face more scrutiny of their operations in the Chinese market after Switzerland-based pharmaceutical company Roche Holding AG said local authorities called on its offices in Hangzhou, Zhejiang province, on Wednesday.

"We are aware that local government authorities visited Roche's office in Hangzhou on May 21, and the details of the visit are not clear," Roche's communications department in Shanghai said in an e-mail statement on Thursday.

"We will fully cooperate with the authorities involving any inquiries," the statement said.

The company's Beijing office is reportedly under investigation, according to news portal Netease.com.

Bao Lei, Roche's Shanghai-based director of communications, denied the report when contacted by telephone.

On May 14, an executive at British drugmaker Glaxo-SmithKline Plc was charged with leading a network to bribe doctors and hospitals to use the company's drugs.

The Chinese government initiated an anti-corruption campaign for the medical industry last July after conducting a bribery investigation into GSK.

The scandal widened across the industry, with other multinational pharmaceutical companies also facing scrutiny in China over claims they bribed medical staff to prescribe their products.

Roche said the company was not under government scrutiny at that time.

Commenting on the latest visit, Bruce Liu, an industry veteran, said it wasn't entirely unexpected, given that many drug companies faced probes last year.

"What is a bit surprising, though, is the harshness of recent allegations and actions against what had been widely perceived as the 'cardinal sin' in the industry," Liu added.

Against this backdrop, and with uncertainty over regulatory developments, some drug companies have started to shift away from traditional sales practices.

GSK said at the end of 2013 that it will no longer compensate its Chinese sales representatives based on sales volume.

"I believe that patients and patient groups, payers and disease management platforms are among the increasingly important stakeholders to engage going forward. It will always take investments, efforts and courage to break out of the mold, but that has become an imperative to stay away from the systemic risks," said Liu.

Roche, the world's largest maker of cancer drugs, said it had seen continued strong growth in China in recent years.

In 2013, the company's key emerging markets showed growth of 12 percent, boosted by 21 percent sales growth in China. Diagnostics sales grew 4 percent, consolidating the division's leading market position, according to its financial report.