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.

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.

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.

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.”