Viagra puts Pfizer in the regulatory glare

Pfizer Inc, the United States-based pharmaceutical company, has been fined 100,000 yuan ($15,570) by Shanghai's market supervision authorities for paying four drugstore chains to recommend its market-leading erectile dysfunction drug, Viagra.

Pfizer signed two agreements with China National Medicines Corporation Ltd in 2004 to exclusively distribute and sell Viagra, according to a statement by authorities.

Between 2011 and 2013, Pfizer had signed agreements with the four drugstore chains to have them display the drug in Shanghai to boost sales.

The agreements required the stores to display Viagra as a recommended product, and ensure the product was given what the authorities called a centralized, fixed position on prescription-drugs counters, with a certain quantity of display and specific space.

Shanghai's Pudong market supervision and management department said Pfizer paid nearly 930,000 yuan for such displays which they said violated drug management rules.

Officials said the rules prohibit drug manufacturing and operating companies and medical bodies during the buying and selling of drugs of giving or receiving kickbacks or other benefits, in what it called under-the-counter deals.

The authorities have asked Pfizer to correct the illegal behavior, and confiscated alleged income of nearly 2.96 million yuan, as well as imposing the 100,000 yuan fine.

Pfizer said it had accepted the administration penalty decision made by the Pudong authorities.

"Due to some lapses in supervision, the display agreements were not executed accurately in these pharmacies," Pfizer said in a written reply to China Daily.

"Once this matter was brought to the attention of Pfizer's leadership in China, we took immediate action to investigate the matter and cooperated fully with Chinese authorities.

"We deeply regret that certain conduct may have violated Pfizer's policies and the laws in China. Pfizer regularly reviews our processes and we have already incorporated improvements in our policies and practices related to pharmacies, to ensure that we comply with all laws that apply to our business activities in China and throughout the world," said the company.

Pfizer has a dominant share of the Chinese erectile dysfunction medicine market with its patented Viagra.

wanghongyi@chinadaily.com.cn