China arrests two people linked to drug bribery claims

Posted Aug 22, 2013 by Tim Sandle
The co-founders of a business advisory company that has worked with GlaxoSmithKline have been arrested in China on suspicion of breaking laws related to purchasing personal information.
China: A display of police drill.
China: A display of police drill.
File photo
The two people arrested are British national Peter Humphrey and his wife Yu Yingzeng, states the Wall Street Journal. The two jointly run a company called ChinaWhys, a Hong Kong-based investigation firm. ChinaWhys offers "discreet risk mitigation solutions, internal process audits, due diligence and commercial investigation services," according to the firm's website.
The arrests related to an investigation on-going in China into bribery allegations against the global pharmaceutical giant GlaxoSmithKline (GSK). It has been suggested that ChinaWhys had undertaken work with GSK and other drug makers. The blog EthiBase states that GSK have said that Humphrey "had “never been a GSK employee." However, when asked whether Humprey had ever worked as a contractor for the pharmaceutical giant, GSK declined to comment further.
Digital Journal has reported recently that GSK has been accused of bribing Chinese government officials, doctors, hospitals and industry associations using travel agencies as conduits for the cash in China. Chinese authorities have also stated that sexual favors were offered as bribes.
Senior GSK executives in China are accused of an orchestrated attempt to falsify invoices, pay sweeteners to third parties and siphon off payments for their own use. GSK has subsequently admitted that some of its operatives have taken part in unscrupulous activities.
GSK is not the only large pharmaceutical firm to end up in trouble, for authorities in China are looking into the French pharmaceutical firm Sanofi's activities, following on from bribery accusations dating back to 2007. Furthermore, PharmaGossip reports that U.S. drugmaker Eli Lilly and Co has said it is "deeply concerned" about allegations published in a Chinese newspaper that it spent more than 30 million yuan ($4.90 million) to bribe doctors in China to prescribe the firm's medicines instead of rival products.
There has been no connection announced with ChinaWhys and these various allegations. However, the arrests form part of China's investigation into corrupt practices involving pharmaceutical companies, according to the South China Morning Post.