Danone food unit Nutricia has started an internal investigation into bribery claims in China.
A report in Chinese newspaper 21st Century Business Herald has alleged that Nutricia, maker of KariCare milk formula, bribed doctors to boost sales.
The report, which cited an unidentified person, claimed that the unit gave gifts and travel subsidies to more than 100 doctors in 14 hospitals in Beijing.
This is the second such allegation made against a Danone unit in recent weeks.
“At the moment we still don’t know the details,” Zhao Qinghua, a spokeswoman for Nutricia in China, was quoted as saying by the Reuters news agency.
“We need to wait to see the outcome of the investigation before we can make our next plans.”
A report in Chinese newspaper 21st Century Business Herald has alleged that Nutricia, maker of KariCare milk formula, bribed doctors to boost sales
Earlier this month a report on China Central Television alleged that Dumex, a baby food brand owned by Danone, bribed doctors to boost sales.
It was accused of giving “sponsorship fees” or payments of up to 10,000 yuan ($1,632) to hospital staff.
Dumex said it was “shocked” by the allegations and was investigating the claims.
The French food giant has also faced other problems in China this year.
Danone cut prices for its infant milk formula products by as much as 20% after China’s top economic planning body fined it in August for price-fixing.
The company also had to issue a precautionary recall of its milk formula products last month after one of its suppliers, Fonterra, said some items may have been contaminated.
Demand for foreign brands has surged in China, after tainted milk scandals in recent years led to a distrust of local producers.
According to some estimates, foreign brands now account for about half of all infant milk sales in the country.
However, foreign companies have come under scrutiny recently amid a government-led crackdown on corruption in the healthcare sector.
Swiss drugmaker Novartis says it is investigating claims that its eye care unit, Alcon, bribed doctors in over 200 hospitals in China to promote its lens implants.
On Tuesday, a Chinese newspaper alleged that Alcon paid doctors “research fees” through a third-party for fake clinical trials that never took place.
This is the second such allegation to be made against Novartis recently.
Last month, the 21st Century Business Herald claimed Novartis bribed doctors to increase drug sales.
The latest report was also carried by the same paper.
Alcon allegedly bribed doctors in over 200 hospitals in China to promote its lens implants
“Alcon does not tolerate activities that are not in compliance with the laws and regulations in the markets where we operate,” Novartis said in a statement.
“When any inappropriate activities are identified, we take swift remedial action.”
Novartis is the latest pharmaceutical company to come under scrutiny in China.
Last month, the 21st Century Business Herald carried a report making bribery claims against US drugmaker Eli Lilly.
It cited a former employee of the firm, identified by a pseudonym, as saying the firm paid out 30 million yuan ($4.9 million) as bribes to doctors to prescribe its drugs.
Eli Lilly said it had launched an internal probe last year after a former manager made similar allegations against it. It said that while it had not been able to verify the allegations it was continuing to investigate them.
In July, Chinese authorities accused British drug giant GlaxoSmithKline (GSK) of bribing doctors to boost sales of some of its drugs in the country.
GSK is alleged to have directed up to $500 million through travel agencies to facilitate bribes to doctors and officials.
The company has admitted that some senior executives in its China office appear to have broken the law.
GSK has said that it is co-operating with the authorities.
Dumex – Danone baby food unit – said it is investigating claims the company bribed hospital staff in China to use its products.
According to China Central Television, Dumex allegedly paid doctors and nurses in the northern city of Tianjin to promote its baby formula products.
The report, which cited an unidentified former sales manager, comes amid an anti-corruption drive by Beijing.
Dumex said it was “extremely shocked” by the allegations.
“Dumex Baby Food Co strictly adheres to Chinese laws and regulations,” a company spokeswoman said in a statement.
The latest allegations against Danone come amid a government-led crackdown on corruption in its $350 billion healthcare market.
Dumex allegedly paid doctors and nurses in the northern city of Tianjin to promote its baby formula products
Some inquiries have targeted foreign firms, including British pharmaceutical giant GlaxoSmithKline, which is being investigated for allegedly using inducements to promote the sale of its medicines.
In the CCTV report, Danone’s Dumex brand is accused of giving “sponsorship fees” or payments of up to 10,000 yuan ($1,632) to hospital staff.
The French food giant has faced numerous problems in China this year.
Danone cut prices for its infant milk formula products by as much as 20% after China’s top economic planning body fined it in August for price-fixing.
The firm also had to issue a precautionary recall of its milk formula products last month after one of its suppliers, Fonterra, said some items may have been contaminated.
China is an important market for companies such as Danone, which is the country’s third-largest baby formula provider.
Danone’s baby nutrition unit also makes more than 20% of its overall sales from China.
Demand for foreign brands has surged in China, after tainted milk scandals in recent years led to a distrust of local producers.
According to some estimates, foreign brands now account for about half of all infant milk sales in China.
