Reuters: Regulatory News: UPDATE 1-GSK examines Botox sales tactics used in China

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UPDATE 1-GSK examines Botox sales tactics used in China Jul 8th 2013, 07:02 Mon Jul 8, 2013 3:02am EDT * Drugmaker probes claims of corrupt marketing practices * GSK says inquiries so far show no evidence of wrongdoing * Latest allegations come as China steps up pharma scrutiny SHANGHAI/LONDON, July 8 (Reuters) - GlaxoSmithKline said on Monday it was investigating new allegations that its staff had used improper tactics to market Botox in China, but had so far found no evidence of bribery or corruption. The move follows a claim that GSK staff allegedly handed doctors cash and other rewards for prescribing Botox treatment, which the British group sells in China under an agreement with patent-holder Allergan. The latest allegations against GSK, which is already under investigation by Chinese police for unspecified "economic crimes", were first reported by the Wall Street Journal. The newspaper said internal documents and email showed GSK's China sales staff were also apparently instructed to use their personal email addresses to discuss marketing strategies related to Botox. A GSK spokesman in London said the company believed the new allegations over Botox came from the same source who previously made claims over corruption in China - claims which GSK said earlier it had investigated and found to be without foundation. "Nevertheless, we are investigating these new claims. However, our inquiries to date have found no evidence of bribery or corruption in relation to our sales and marketing of therapeutic Botox in China," the spokesman said. "GSK has some of the toughest compliance procedures in the sector. We are proud of our high standards and operate in accordance with them." The Wall Street Journal said emails and documents it had seen also discussed a marketing strategy for Botox that targeted 48 doctors and planned to reward them with either a percentage of the cash value of the prescription, or educational credits, based on the number of prescriptions the doctors made. The strategy was called "Vasily", after the Russian World War II sniper Vasily Zaytsev. "We have investigated the specific claim on the so-called Vasily programme. Our investigation has found that while the proposal didn't contain anything untoward, the programme was never implemented," the company spokesman said. GSK is responsible for therapeutic sales of Botox in China - for example, to treat facial spasms - rather than its use as a cosmetic treatment to remove wrinkles. The allegations come as police in the south-central Chinese city of Changsha investigate high-level Chinese staff at GSK on suspicion of economic crimes. It is not clear if the Changsha investigation is related to any of the allegations. GSK, Merck and other foreign and domestic drugmakers are also being investigated by China's top economic planning agency on cost and pricing issues, as foreign firms come under pressure from Beijing over possible price-fixing. China is an increasingly important market for international pharmaceutical companies, which are relying on growth in emerging markets to offset slower sales in Western markets where many former blockbuster drugs have lost patent protection. IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second-biggest drugs market behind the United States by 2016. Link this Share this Digg this Email Reprints

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