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.