(Bloomberg) -- Police in China have detained five current and former employees of British drugmaker AstraZeneca Plc for questioning about potential illegal activities, according to people familiar with the matter.
The individuals being held are all Chinese citizens who marketed cancer drugs in AstraZeneca’s oncology division, the people said, asking not to be identified discussing private information. The investigation is being led by police in the southern metropolis of Shenzhen, and the detentions took place earlier in the summer, the people said.
One probe is related to the company’s collection of patient data, and whether that infringed China’s data-privacy laws, according to the people. Authorities are also looking into some of the individuals’ involvement in importing a liver cancer drug that hasn’t been approved for distribution in mainland China, one of the people said.
“We are aware a small number of our employees in China are under investigation and we have no further information to share at this point,” AstraZeneca said in a statement to Bloomberg News. Shenzhen police didn’t immediately respond to a request for comment.
The investigations are a potential setback for the global pharmaceuticals giant, which is deeply entrenched in China. AstraZeneca executives have publicly expressed their confidence in the Chinese market, even as heightened geopolitical tensions have caused other multinational companies to take a more cautious view on the world’s second largest economy.
The UK-based drugmaker was previously taken to task by Chinese authorities in 2022 for allegedly tampering with the gene-testing results of cancer patients to make treatment eligible for reimbursement by China’s state-run medical insurance. AstraZeneca said at the time that it had taken disciplinary action against some employees.
Some foreign companies have become concerned about the safety of their employees in China, and the risks of being caught up in government probes where little information is forthcoming from authorities. Chinese police have been known to hold people for questioning lasting months or even years.
Last year, five local employees of US due diligence firm Mintz Group were detained and its Beijing office was raided by police. The firm was later fined for what authorities said was illegal data collection. In a separate case, three employees of advertising company WPP Plc were arrested in China as part of a bribery investigation. China has also detained individuals who work for foreign companies for suspected espionage activities.
New Data Laws
Beijing recently implemented new laws on data security and personal information protection that require companies to keep most of the data they have gathered in China within the country. Some multinational companies have fretted about running afoul of those laws, which could result in fines and other penalties.
The investigation into AstraZeneca’s sales practices comes amid an ongoing crackdown on drug smuggling in China. While Beijing has launched regulatory reforms over the years to speed up reviews of life-saving medicines, some new therapies are either still not available in China, or approved much later than in other developed nations. That has forced patients to find drugs from outside China, sometimes through illegal channels.
While China allows patients to seek therapies it hasn’t approved from other jurisdictions, it’s illegal to bring unauthorized medicines into China for sale. It’s unclear if AstraZeneca employees facilitated the importation of the yet-to-be approved liver cancer drug, called Imjudo, into the country.
In July, regulators in the southern Chinese province of Guangdong busted a drug smuggling ring, seizing 200 million yuan ($28 million) worth of medicines treating diseases including cancer and diabetes, local media Jiemian reported in August.
AstraZeneca has been in China since 1993, and reported $5.9 billion in revenue from the country last year, more than 10% of the group’s total. It has global supply sites in Wuxi, Taizhou and Qingdao, and sells drugs and therapies in China that treat cancers, respiratory ailments, cardiovascular diseases and other conditions.
The drugmaker has committed more than $1 billion for two new factories in the country since last year. It has also partnered with a local biotechnology company to join the global race to develop weight loss medicines, and acquired another Chinese firm for cell therapies.
Last month, Leon Wang, AstraZeneca’s China President, told an audience of global CEOs and government officials gathered in the coastal city of Qingdao that the company firmly believes in Chinese manufacturing as an indispensable part of the global supply chain, and Chinese innovation’s potential to jump ahead and lead the industry.
AstraZeneca, Wang added, aims to become an multinational company that combines innovation from both China and the West, according to a post on AstraZeneca’s official WeChat account.
(Updates with AstraZeneca comment in fourth paragraph.)
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