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* Sanofi regional office visited by officials this week
* Eli Lilly says had routine visit earlier in 2013
* AstraZeneca sales rep still detained in Shanghai
* AstraZeneca CEO sees short-term disruption, price pressure
By Ben Hirschler and Elena Berton
LONDON/PARIS, Aug 1 (Reuters) - Chinese authorities visiteda regional office of French drugmaker Sanofi this weekin the latest sign of a widening investigation into Westerndrugmakers.
Eli Lilly said it had also been visited by officialsin the same city of Shenyang as part of a "routine" probe whichhad started earlier this year, while the CEO of AstraZeneca, which has a sales executive in detention in Shanghai,warned of short-term "turmoil" in the sector.
The latest developments suggest a series of probes intoover-pricing and alleged bribery in the industry may have abroad impact, in a market that has been a particular bright spotfor Western pharmaceuticals who face slowing sales at home.
"In the short term, there could be some ups and downsbecause this issue will create turmoil. It may well be that theindustry experiences more intense price revisions," AstraZenecaCEO Pascal Soriot told Reuters on Thursday.
"But even if this happens, in the mid- to long-term China isa growing market - there is no doubt about that in my mind,"Soriot added, stressing his company had no plans to cut backinvestment in the country.
Chinese police have detained four Chinese executives ofGlaxoSmithKline (GSK) and questioned at least 18 otherstaff amid allegations the drugmaker funnelled up to 3 billionyuan ($489 million) to travel agencies to facilitate bribes todoctors and officials.
At the same time, the powerful National Development andReform Commission is examining pricing by 60 local andinternational pharmaceutical companies.
Sanofi said its office in Shenyang - one of 11 regionaloffices in China - had been visited by officials from the StateAdministration for Industry and Commerce (SAIC) on July 29.
"We are not really aware of the purpose of the visit, we areworking with SAIC," CEO Chris Viehbacher told reporters onThursday as he presented the company's second-quarter results.
Viehbacher added that the French group's local head officein Shanghai had not been contacted by Chinese authorities.
A spokeswoman for Eli Lilly said SAIC officials had alsovisited its office in Shenyang, adding that the visit was aregular business inspection and not related to the GSK case,which is being handled by the Ministry of Public Security.
SAIC is one of China's anti-trust regulators in charge ofmarket supervision, which also looks into low-level briberycases.
COMPLIANCE SCRAMBLE
AstraZeneca and Belgian drugmaker UCB have alsobeen visited recently by Chinese authorities, but it remainsunclear if or how the cases are related.
AstraZeneca's Soriot said one sales representative inShanghai was continuing to be detained by police, although twoother employees who were questioned were quickly released. Localpolice have told the company that the case is an "individual"investigation and not linked to the GSK scandal.
Big drugmakers have been scrambling to ensure theircompliance systems are up to scratch in the wake of the GSKallegations.
Soriot, speaking after presenting quarterly results, saidhis team had "double- and triple-checked that everything iscompliant" and he was confident the firm's internal systems toprevent bribery and corruption were robust.
China is an especially important market for AstraZeneca,since it has a long-standing presence in the country and punchesabove its weight in terms of market share. It enjoys strongsales of medicines like Nexium for controlling stomach acid, andSymbicort for asthma and chronic lung disease.
AstraZeneca grew Chinese sales by more than fifth to $431million in the second quarter of 2013 and China represents 7percent of the group's total revenue. China's contribution toGSK sales, by contrast, is just over 3 percent.
A promise last week by GSK to make its drugs more affordablein China in the wake of the bribery scandal is seen by manyanalysts as a lever for Chinese authorities to start pushingback harder on the cost of Western medicines.
One board member of a Western drugmaker not involved in theincidents reported to date said this could lead to some of themore bullish estimates for Chinese sales to revised down,although it would remain a major growth market.
Viehbacher said it was premature to say what repercussionsthe scandal would have on Sanofi's business in China.
"We are examining the issue closely and we are examining ourbusiness in China, but I think it's too early to draw anyconclusions," he told reporters during the quarterly resultsbriefing.
