Executives at British drugmaker GlaxoSmithKline were warned nearly two years ago about critical problems over the way the company conducted research at its drug development centre in China, exposing it to potential financial risk and regulatory action.
A confidential internal audit from November 2011, obtained by The New York Times, suggested that Glaxo's problems may go beyond the sales practices at the heart of a bribery and corruption scandal in China, extending to its Shanghai research centre, which develops neurology drugs for Glaxo.
Some specialists said the failings underscore the problems that can arise when big drug companies export their scientific development to emerging markets such as China.
Auditors found researchers did not report the results of animal studies in a drug being tested on humans, a breach one medical ethicist described as a "mortal sin" in the world of drug research. They also found researchers did not properly monitor clinical trials and paid hospitals in ways that could be seen as bribery. Last year, Glaxo said, a more favourable audit found the concerns had been addressed. But outside professionals said the problems in the initial audit painted a picture of an organisation that failed to keep tabs on a crucial research centre as it expanded.
Glaxo said it was committed to conducting "robust" audits of its business practices, and in this instance, "the process worked exactly as intended".
It said: "Patient safety is paramount and the audit reports do not show that this was compromised." The 2011 audit report also raised alarms about the way the Shanghai office was paying people overseeing the company's trials at outside hospitals or clinics. According to auditors, Glaxo was paying many a flat fee for the cost of a full-time co-ordinator, regardless of the number of participants enrolled in the trial.
Chinese investigators said Glaxo was involved in a widespread bribery and corruption scheme in which the company used travel agencies to funnel illegal payments to doctors and officials to bolster drug sales. Authorities also said they were looking into the practices of other drugs companies.
Meanwhile, an employee from rival drug maker AstraZeneca was detained by Chinese authorities in Shanghai on Friday.
AstraZeneca said: "We believe that this investigation relates to an individual case and while we have not yet received an update from the Public Security Bureau, we have no reason to believe it is related to any other investigations."