Novartis is the latest company to face bribery allegations in China after a whistleblower accused the firm of offering kickbacks to doctors to ensure cancer drugs were prescribed.

The sales rep involved, who has spoken with the Chinese media, claims her manager instructed her to bribe doctors by paying them 50,000 Yuan ($8,000) to prescribe at least five doses of the cancer drug Sandostatin LAR. Expectations were for sales figures to increase during June and July this year.  

Novartis has launched an internal investigation, while the sales rep has filed a five million Yuan ($817,000) compensation claim against the company.

“Novartis takes allegations of misconduct seriously and will take appropriate actions depending on the findings once the investigation is concluded,” the company said in a statement.

The new allegations come as Chinese authorities announced they would widen their probe into drug pricing and corruption, with the central government’s State Administration for Industry and Commerce announcing it would also look into “bribery, fraud and anti-competitive practices” among other industries including car dealerships and real estate agents.

The pharma industry in China has taken a battering over the past month after bribery allegations first arose when four of GlaxoSmithKline’s sales staff were put under investigation for allegedly paying up to £320million in a bid to increase market share.

Other multinational companies caught up in the bribery allegations include AstraZeneca, Lilly, Lundbeck, Novo Nordisk, Sanofi and UCB. Chinese companies, while not targeted, have seen their shares drop as a result of the allegations.  

Hospitals have been ordered to search for corruption in regards to the pricing and purchasing of drugs and in clinical trials. According to a report in the Financial Times, some hospitals have barred sales reps.

The widened probe, which began yesterday, will last for three months. The SAIC said in a statement: “The campaign will strictly root out commercial bribery and practices that limit competition and protect consumers’ rights and interests. It will also strengthen regulation over agents and middlemen and root out fake advertising.” Severe punishments are expected for those found to be involved.

Meanwhile, in a separate probe the Chinese regulator the National Development and Reform Commission is investigating pricing policies at 60 foreign and domestic pharma companies.

The increased interest in pricing and corruption comes as China seeks to tighten its healthcare budget while increasing healthcare access to its citizens. This could dent pharma’s expectations for the country, which has been seen as a favourable emerging market for many companies to expand into because of the increase in chronic diseases and growth potential.