THE president of AstraZeneca’s China division has been placed under investigation by local police, as China advances an anti-corruption crackdown in the healthcare sector.

The British pharmaceutical giant confirmed last week that Leon Wang, who forms part of its senior executive team, was cooperating with an investigation by Chinese authorities.

It did not provide any details about the investigation, although it comes months after police separately detained five current and former AstraZeneca employees.

The investigation is focused on aggressive sales tactics used in at least two of its oncology drugs, the lung cancer treatment Tagrisso and the immunotherapy Imjudo, people familiar with the matter said.

Under Wang’s leadership, AstraZeneca’s China sales grew from just 7% of total revenue in 2013 to 20% at its peak in 2019, giving it the highest exposure to China among its peers.

But it also got hit hard when China radically reformed its generic drug market in 2019. The country’s push to replace expensive foreign brands of off-patent medications with cheap domestic generics saw AstraZeneca lose substantial revenue in treatments like cancer drug Iressa and heart medicine Crestor.

The biggest blow came with its asthma treatment Pulmicort, whose sales plummeted from US$1.46 billion in 2019 to US$645 million in 2022.

Sales growth in China slowed from more than 30% in the 2010s to single digits in recent years. Revenue, which peaked in 2021 at US$6 billion, fell to US$5.8 billion the following year and hasn’t fully recovered.

Wang pivoted, doubling down on innovative medications for which China was still willing to pay top dollar, and deploying a massive sales force to win doctors and patients over.

AstraZeneca managed to get its groundbreaking therapies — Tagrisso among them — approved by China’s drug regulator in as quickly as six months, followed by entry into its State medical insurance list that would allow the massive patient population to access the treatment at a much lower price.

Signaling its commitment to Chinese sales, AstraZeneca agreed to deep cuts to prices —Tagrisso’s price was cut by nearly 60% — in order to get onto China’s national insurance reimbursement list when peers like Merck & Co balked.

Media reports paint a picture of sales people taking unorthodox methods to chalk up orders. In the Tagrisso case, which started in 2022, AstraZeneca employees allegedly helped alter genetic test results so that patients who wouldn’t have qualified for reimbursement of the drug — which was granted only to people with a certain genetic mutation — could get insurance coverage.

In the Imjudo case, AstraZeneca employees may have been linked to efforts to smuggle the immunotherapy, which is approved in other parts of the world but not China, into the country. The drug is widely used along with the company’s other key cancer drug, called Imfinzi, as a combo therapy, incentivizing the company to offer it locally.

Multinational pharma companies have come under regulatory scrutiny in China in the past. In 2013, GSK admitted that its sales organization bribed doctors and hospital officials into prescribing its drugs, issuing a public apology and paying a US$490 million fine.

(SD-Agencies)