HAT-TRICK

China’s 21st Century Business Herald takes on Eli Lilly with its third major whistleblower

August 22, 2013
August 22, 2013

China’s bribery investigations of foreign pharmaceutical companies are becoming par for the course. On Thursday, a local media report (link in Chinese) said that US drug maker Eli Lilly has been using illegal payments to sell its products. Quoting a former manager at the company, the report said that bribery at Eli Lilly’s China operations was “just as bad as at GlaxoSmithKline.”

The Guangzhou-based 21st Century Business Herald said that 30 million yuan ($4.9 million) in bribes had been handed out between 2011 and 2012—apparently less than GSK’s cumulative bribes of 3 billion yuan, but a large amount nonetheless. In a statement released to Reuters, Eli Lilly said it was “extremely concerned” and had been made aware of similar allegations in 2012.

China’s bribery probe, which began with GSK in July, has widened considerably since then. Remarkably, the Herald has been a serial contributor of suspects—Eli Lilly was the third foreign pharmaceutical company to be accused by the paper, based on interviews with whistleblowers. In just the last few weeks, the Herald also reported that France’s Sanofi (paywall) and Switzerland’s Novartis have been using bribery to compete in the Chinese pharmaceutical market, citing anonymous whistleblowers on both occasions.

While the tabloid-prone paper has been known to fall foul of the odd news spoof, its parent company, Nanfang Media Group, has held a largely respected position among Chinese media since another of its papers staged an anti-censorship protest in January. With its third scoop on big pharma’s dark secrets, Nanfang’s Herald is making an international name for itself, with an apparent abundance of disgruntled sources looking to expose a highly lucrative but endemically corrupt sector.

With additional reporting by Jennifer Chiu.

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