Chi­nese agency says sus­pects ar­rest­ed in As­traZeneca in­sur­ance fraud probe

Mul­ti­ple sus­pects were ar­rest­ed in con­nec­tion with an al­leged med­ical in­sur­ance fraud scheme or­ga­nized by As­traZeneca Chi­na em­ploy­ees, the coun­try’s Na­tion­al Health­care Se­cu­ri­ty Ad­min­is­tra­tion (NHSA) said on Sat­ur­day.

The ar­rests oc­curred af­ter an in­ves­ti­ga­tion found ev­i­dence that staff mem­bers tam­pered with the ge­net­ic test­ing re­sults of tu­mor pa­tients in an at­tempt to de­fraud med­ical in­sur­ance funds, ac­cord­ing to the NHSA. As­traZeneca has re­port­ed sub­stan­tial growth in Chi­na de­spite the steep dis­counts it had to make in or­der to get on the coun­try’s Na­tion­al Re­im­burse­ment Drug List, with rev­enue in the coun­try in­creas­ing by 10% in Q3, amount­ing to near­ly $4.7 bil­lion for the first three quar­ters of the year.

How­ev­er, the com­pa­ny not­ed that rev­enues last year were im­pact­ed by pric­ing pres­sure as­so­ci­at­ed with the NRDL and vol­ume-based pro­cure­ment (VBP) pro­grams.

With­out pro­vid­ing much de­tail, As­traZeneca Chi­na said in a state­ment that it con­firmed through its own in­ves­ti­ga­tion back in Au­gust that “a few” of its em­ploy­ees in Shen­zhen had “al­tered or par­tic­i­pat­ed in al­ter­ing pa­tients’ test­ing re­ports,” and are sus­pect­ed of med­ical in­sur­ance fraud.

“Per our cur­rent un­der­stand­ing, these are in­di­vid­ual cas­es. The gov­ern­ment in­ves­ti­ga­tions are still on­go­ing, and the com­pa­ny hasn’t been in­formed of more de­tails,” a spokesper­son told End­points News. 

As­traZeneca Chi­na said it proac­tive­ly re­port­ed the of­fens­es to the lo­cal health­care se­cu­ri­ty bu­reau, and “took se­ri­ous dis­ci­pli­nary ac­tion” against the staff mem­bers, though it’s un­clear if they’re still em­ployed at the phar­ma gi­ant. On Sat­ur­day, the NHSA said an “in-depth in­ves­ti­ga­tion” had been con­duct­ed, and “all crim­i­nal sus­pects have been ar­rest­ed.”

On Dec. 27, As­traZeneca at­tend­ed a joint meet­ing with the Min­istry of Pub­lic Se­cu­ri­ty (MOPS) and the NHSA, which has urged the com­pa­ny to co­op­er­ate in the fol­low-up in­ves­ti­ga­tion, car­ry out its own in­ter­nal in­ves­ti­ga­tion, “plug loop­holes in mar­ket­ing su­per­vi­sion,” and ed­u­cate its em­ploy­ees on fol­low­ing the law.

“As­traZeneca Chi­na is com­mit­ted to ful­ly im­ple­ment­ing these rec­om­men­da­tions, fur­ther strength­en­ing man­age­ment over­sight and con­tin­u­ing to ed­u­cate em­ploy­ees on the ap­plic­a­ble laws and reg­u­la­tions, en­sur­ing that each As­traZeneca em­ploy­ee per­forms dai­ly work with a law abid­ing and com­pli­ance mind­set,” the com­pa­ny said in a state­ment.

Chi­na’s Na­tion­al Med­ical In­sur­ance Bu­reau will now work with oth­er agen­cies to car­ry out a na­tion­wide cam­paign against tam­per­ing with ge­net­ic test re­sults, ac­cord­ing to the NHSA.

The news comes near­ly three decades af­ter As­traZeneca set roots in Chi­na in 1993. Just over two years ago, the com­pa­ny un­veiled three ma­jor ini­tia­tives in the hopes of ex­pand­ing its foot­print there, in­clud­ing the cre­ation of a new R&D cen­ter and AI in­no­va­tion cen­ter in Shang­hai, and a new Health­care In­dus­tri­al Fund in part­ner­ship with Chi­na In­ter­na­tion­al Cap­i­tal Cor­po­ra­tion Lim­it­ed.

“Chi­na is rapid­ly emerg­ing as a glob­al sci­en­tif­ic pow­er­house, which is why we have tak­en this ex­cit­ing de­ci­sion to fol­low the sci­ence, by ex­pand­ing our R&D pres­ence and by work­ing with the in­vest­ment com­mu­ni­ty,” CEO Pas­cal So­ri­ot said at the time.

To date, the com­pa­ny says it has in­vest­ed around three-quar­ters of a bil­lion dol­lars in Chi­nese phar­ma­ceu­ti­cal in­no­va­tion. And it doesn’t hurt that the Chi­nese mar­ket has added bil­lions of dol­lars to the its top line.

As­traZeneca isn’t the on­ly Big Phar­ma com­pa­ny with in­sur­ance fraud woes. Back in Au­gust 2020, Ab­b­Vie agreed to pay $24 mil­lion to set­tle an in­sur­ance fraud suit re­lat­ed to the pro­mo­tion of its cash cow Hu­mi­ra.

That set­tle­ment came near­ly four years af­ter a whistle­blow­er first re­port­ed Ab­b­Vie’s prac­tice of de­ploy­ing reg­is­tered nurs­es to vis­it pa­tients at home or call them by phone to en­sure that Hu­mi­ra pre­scrip­tions are filled. Ab­b­Vie was al­so charged with pro­vid­ing il­le­gal kick­backs to doc­tors in an at­tempt to en­cour­age them to pre­scribe Hu­mi­ra for a range of an­ti-in­flam­ma­to­ry dis­eases.

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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David Loew (Ipsen)

Ipsen snags an ap­proved can­cer drug in $247M M&A deal as an­oth­er bat­tered biotech sells cheap

You can add Paris-based Ipsen to the list of discount buyers patrolling the penny stock pack for a cheap M&A deal.

The French biotech, which has had plenty of its own problems to grapple with, has swooped in to buy Epizyme $EPZM for $247 million in cash and a CVR with milestones attached to it. Epizyme shareholders, who had to suffer through a painfully soft launch of their EZH2a inhibitor cancer drug Tazverik, will get $1.45 per share along with a $1 CVR tied to achieving $250 million in sales from the drug over four consecutive quarters as well as an OK for second-line follicular lymphoma by 1 Jan. 2028.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.

Sen. Thom Tillis (R-NC) (J. Scott Applewhite/AP Images)

Phar­ma-friend­ly sen­a­tor calls on FDA for a third time to show patent pro­tec­tions should­n't be blamed for high drug prices

North Carolina Republican Sen. Thom Tillis made a name for himself in the 2020 election cycle as the darling of the pharma industry, accepting hundreds of thousands in campaign contributions, even from the likes of Pfizer CEO Albert Bourla.

Those contributions have led Tillis to attempt to re-write patent laws in pharma’s favor, a move which failed to gain steam in 2019, and request for a third time since January that the FDA should help stop “the false narrative that patent protections are to blame for high drug prices.”

EMA signs off on 3 drugs re­cent­ly re­ject­ed by FDA, in­clud­ing Bio­Mar­in's new he­mo­phil­ia gene ther­a­py

The EMA’s human medicines committee on Friday recommended three new drugs for approval or conditional approval, even as their US counterparts have rejected these three for various reasons.

In a major move, CHMP offered a thumbs-up to a conditional marketing authorization for the first gene therapy to treat severe hemophilia A, although the agency cautioned that it’s so far unknown how long the effects of infusion will last.

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Joe Papa (Ryan Remiorz/The Canadian Press via AP, File)

Joe Pa­pa re­signs as chair of Bausch Health as bil­lion­aire John Paul­son takes over

Joe Papa, chair of Bausch Health, officially resigned on Thursday and the board appointed billionaire hedge fund manager John Paulson as the new chair, effective immediately.

The specialty pharma company sought to make clear that Papa’s abrupt departure “was not due to any dispute or disagreement with the Company, its management or the Board on any matter relating to the Company’s operations, policies or practices.”

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