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AstraZeneca has overhauled its local management in China in a bid to put recent scandals behind it and revive sales following the arrest of the country’s president.
The FTSE 100 group has appointed new executives to lead its Chinese oncology business, which has come under heavy scrutiny following two incidents including alleged illegal sales practices for cancer drugs.
The scandal ensnared Chinese President Leon Wang, whom the company announced in November had been arrested, along with several other employees. AstraZeneca has lost more than £15 billion in market capitalization following reports of an investigation by local authorities.
Alex Lin will replace Michael Lai as the country’s chief executive, two people with direct knowledge of the matter said. Lai was one of Wang’s senior managers. Lai has moved to the US to take charge of a key cancer drug for AstraZeneca and report to the head of oncology, people close to the company said. Lai did not respond to a request for comment.
The drugmaker has promoted Mary Guan, who previously worked at China’s general medicine unit, to head of oncology in China as part of an effort to deal with the unit, a person familiar with the matter said.
AstraZeneca declined to comment. It has previously said it would cooperate fully with Chinese authorities, and also said Wang was cooperating with the investigation.
The drugmaker – the largest foreign pharmaceutical group in China by 2023 sales – is trying to restart its operations in China, where insiders say they expect a drop in sales as hospitals are unwilling to do business with the company. The new management will be crucial in putting AstraZeneca back on track in what was once its key growth market. China will contribute 13 percent of global sales in 2023.
The company wants to “show that there is a clear break with the old management,” said a person familiar with the company’s position.
Another person said that “many changes are expected in the China Leadership team, but have not yet been announced.”
AstraZeneca CEO Iskra Reic was appointed in early December to take over from Wang, who also led the international region that includes other emerging markets.
“AstraZeneca has distanced itself from Leon and the other affected employees,” said a person close to the company.
They added that Wang was “under intense pressure to rejuvenate growth” after China’s revenues fell in 2022.
AstraZeneca executives have not received a formal explanation from Chinese authorities and have been unable to contact Wang, people familiar with the matter said. The company has concluded that the investigation concerns the alleged illegal import of the cancer drug Imjudo via Hong Kong into China – where the drug is not approved – because authorities have also arrested AstraZeneca’s former head of oncology, Yin Min arrested, who was in charge of the department. during the alleged crimes.
In addition, dozens of sellers have been convicted of health insurance fraud in the past two years after courts found they tampered with genetic test results to ensure lung cancer patients qualified for their drug Tagrisso under a national reimbursement system.
The drugmaker is pinning much of its hopes in China on its breast cancer drug Enhertu, which authorities recently said would be included in the state health insurance system.