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American detained in China amid pharma probe

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(Globalpost/GlobalPost)

An American has been detained in China, a US embassy official said on Tuesday, as Chinese authorities continue a probe into corruption by multinational pharmaceutical companies.

Asked if a US citizen had been detained during the probe which has included charges of bribery against GlaxoSmithKline (GSK), embassy spokesman Nolan Barkhouse said: "We are aware that a US citizen has been detained in Shanghai. We are in contact with the individual and are providing all appropriate consular assistance."

Barkhouse did not say which firm the US citizen was connected with.

China's authorities this month detained four Chinese GSK executives on allegations that employees paid nearly $500 million in bribes to boost sales. Other pharmaceutical companies have faced increased scrutiny, reports said.

Police say GSK staff offered government officials and doctors payoffs, and took kickbacks from travel agencies to organise conferences, some of which were fake.

A British citizen with connections to the company has also been detained in China, reports said, while GSK's British finance director has been barred from leaving the country.

Allegations of bribes, previously denied by GSK, surfaced earlier this year after a tipster spoke to the Wall Street Journal.

Analysts are sceptical GSK is the only offender in China's medical industry, given an opaque tendering system for drugs and doctors' low salaries.

China has sought to cut drug costs as part of government efforts to provide wider health care coverage.

The GSK case has echoes of another foreign company that ran afoul of Chinese law, Anglo-Australian mining giant Rio Tinto.

Four of its employees were jailed in 2010 for taking bribes from Chinese steel firms.

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http://www.globalpost.com/dispatch/news/afp/130723/american-detained-china-amid-pharma-probe