Abbott Laboratories is the latest foreign pharmaceutical company facing bribery allegations in China. According to 21st Century Business Herald (21CBH), sales staff at Abbott Nutrition offered doctors kickbacks of 8 – 10% of sales revenue as an inducement to buy Abbott products.
The alleged kickbacks resulted in significantly inflated drug prices, the report said.
According to the company website, Abbott Nutrition develops and sells nutritional and related health care products.
One source, going by the pseudonym Liu Yue, said kickbacks of 8 – 10% of sales revenue was common practice and endorsed by the company.
“It is impossible for staff to reach sales quotas if they abide by the company’s compliance regulations” and “in top cities, the kickback for Abbott’s Glucerna SR product can reach over 300,000 yuan ($49,564) in a month,” Liu Yue said.
According to emails provided by anonymous sources, Abbott’s sales division required staff to visit doctors 12 times a day, and failing to do resulted in disciplinary warnings. In addition, staff were required to organize at least nine medical conferences per quarter.
Liu also alleged that all kickbacks were paid in cash to avoid leaving evidence. The expense reimbursements for the alleged cash bribes were disguised as expenses for banquets, meetings or fake conferences organized by partner travel agencies.
Abbott executives monitored reimbursements closely but didn’t question their staff about methods used to make sales, according to the report.
In a statement, the company said it “demanded its staff strictly abide by the laws and regulations of the country, as well as company policies.” Abbott told Southern Metropolis Daily that it would investigate the bribery allegations and release the findings in a timely manner.
The allegations against Abbott come after British drugmaker GlaxoSmithKline, was accused of funneling more than $600 million in bribes to doctors and hospitals through travel agencies to promote sales in China.
Sources: 21st Century Business Herald (21世纪经济报道), Southern Metropolis Daily (南方都市报)