Chinese authorities have detained five current and former employees of AstraZeneca Plc ( AZN ) as part of a broader investigation into alleged illegal activities in the pharmaceutical sector.

The investigation focuses on potential breaches of data privacy laws and the importation of unlicensed cancer medications.

The detained individuals, all Chinese nationals, were associated with the marketing of oncology drugs in China, where AstraZeneca ( AZN ) generates approximately 13% of its global revenue.

Also Read: AstraZeneca ( AZN ), Sanofi And Other Pharma Giants Pursue Chinese Deals Despite Rising US-China Strife.

“We are aware a small number of our employees in China are under investigation, and we have no further information to share at this point,” AstraZeneca ( AZN ) told Bloomberg.

The inquiry, spearheaded by police in the Shenzhen region, examines whether these employees imported a liver cancer treatment that had not received approval for use in mainland China.

Further scrutiny is directed at the methods AstraZeneca ( AZN ) employed to collect patient data, probing for any violations of China’s stringent privacy regulations.

This crackdown is part of Beijing’s broader anti-corruption initiative, targeting the misuse of public funds and unethical practices within the healthcare sector.

Amid rising geopolitical tensions and concerns over foreign business operations in China, AstraZeneca ( AZN ) had previously considered strategies to safeguard its interests, including a potential spin-off of its Chinese business.

The Bloomberg report adds that the probe into AstraZeneca’s marketing strategies coincides with China’s intensified efforts to combat drug smuggling.

Despite Beijing’s regulatory reforms to expedite the approval of critical medicines, many new treatments remain unavailable or face delayed approvals compared to other developed countries.

This gap has led patients to seek medications from abroad, occasionally resorting to illicit means.

Price Action: AZN stock is down 3.39% at $82.84 at last check Thursday.

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