AstraZeneca's 'Star Program' Fraud Case Involves 30 Million Yuan

Between June and September 2024, a series of fraud cases related to AstraZeneca have received legal rulings, involving a scheme known as the "Star Program." This operation revealed how pharmaceutical representatives manipulated genetic testing reports to defraud medical insurance funds.

AstraZeneca, the fastest-growing British multinational pharmaceutical company in China and a notable sales leader in the industry, has been implicated in multiple medical insurance fraud cases. According to criminal judgments obtained by reporters, several AstraZeneca fraud cases have been tried or ruled upon in Shenzhen and Fujian over the past three years, with pending cases in Chongqing and Jiangxi. Industry insiders indicate that these fraud cases represent one of the most significant disruptions caused by multinational pharmaceutical companies in recent years.

The importance of genetic testing reports is akin to legal judgments; they determine whether cancer patients can access potentially life-saving targeted drugs and whether these drugs are covered by medical insurance, which is crucial for patients and their families.

Relevant judgments show that to include the cancer drug Tagrisso (osimertinib) in insurance reimbursement, AstraZeneca's representatives altered genetic testing reports or colluded with testing companies to modify results, sometimes even issuing reports without conducting tests. Reports indicate that the total amount involved in AstraZeneca's medical insurance fraud cases is approximately 30 million yuan, with sentences for employees ranging from grassroots representatives to regional managers reaching up to 13.5 years.

It is perplexing that, as the fraud cases continue to unfold, some grassroots representatives claimed that altering test reports was motivated by sympathy for patients, while others stated that the alterations were known and approved by higher management. Whether this was due to sympathy, tacit approval, or conspiracy remains unclear.

The drug at the center of this medical insurance fraud scandal is AstraZeneca's flagship cancer treatment, Tagrisso. Tagrisso is a third-generation EGFR-TKI inhibitor that effectively addresses drug resistance in lung cancer, earning it the nickname "miracle drug" in the field. Since submitting its clinical application in September 2016, Tagrisso was approved for market launch within six months, entered the national medical insurance system in 2018, and saw its price drop by over 60% following negotiations in 2020. This pace was unprecedented in the domestic pharmaceutical environment at the time.

However, not all lung cancer patients can use Tagrisso. Since October 2018, patients with T790M-positive non-small cell lung cancer have been eligible for insurance reimbursement. Although Tagrisso could be used for first-line treatment in T790M-negative patients starting September 2019, reimbursement no longer required a positive EGFR T790M mutation test result until the medical insurance catalog was updated in March 2021.

After Tagrisso was included in the medical insurance system, its price dropped from 51,000 yuan per box to 15,300 yuan, and further to 5,580 yuan, creating a significant difference between out-of-pocket costs and insurance reimbursement. This also means that non-T790M-positive patients wishing to use Tagrisso and seek insurance reimbursement may have been motivated to alter genetic testing reports.

In this context, in July 2021, the Shenzhen Medical Insurance Bureau discovered AstraZeneca's alleged manipulation of cancer patients' genetic testing results to defraud insurance funds, involving 17 employees, based on a tip-off. The fraudulent methods typically used by pharmaceutical representatives included sending patient samples for testing, then directly altering negative EGFR T790M results to positive after receiving the reports; some representatives even privately collected testing fees without submitting samples. Insiders noted that representatives aimed to boost sales performance while patients sought to "blindly trial" the drug to see if it worked.

The rise of AstraZeneca's medical insurance fraud cases in places like Fujian was significantly driven by the "Star Program." Since January 2019, Huang Wei, a former regional manager for AstraZeneca in Fuzhou and Quanzhou, inquired with intermediary Wang Chao about resources for T790M single-target testing at lower costs. Huang expressed a desire for a higher positivity rate, to which Wang replied that if they wanted a "guaranteed positive report," they should mark a five-pointed star on the testing application form, and the testing company would issue a positive report. Subsequently, the company did indeed provide positive reports for the marked testing forms. According to co-defendants, after 2020, AstraZeneca representatives sent 397 testing samples to this company, of which over thirty had the "star" marking.

In addition to the three mentioned, the "Star Program" involved over twenty other representatives, regional managers, and district managers. One representative named Huang stated that in June 2020, he learned about the "Star Program" and the commission structure: a commission of 200 yuan for a T790M single-gene test and 4,000 yuan for a multi-gene test. Before the incident, he had earned a total commission of about 50,000 yuan.

Besides the directly profiting representatives, some mid-level leaders were implicated due to "performance pressures." An industry insider commented that AstraZeneca creates and transmits performance anxiety. Firstly, they hold more meetings than other companies, emphasizing urgency and heavy workloads; secondly, the company has various detailed assessment metrics, which differ by team, set to motivate frontline employees.

Another representative working for a foreign company mentioned that obtaining patient information is a common method to boost performance, depending largely on the sales team's leadership style. "Some aggressive teams even have weekly KPIs for the number of patient information entries," he said.

While this method is not highly efficient, many still attempt it. The main reason is that in recent years, some multinational pharmaceutical companies have faced significant performance pressures in China, with AstraZeneca being one of them. "Headquarters doesn't necessarily put explicit pressure on China and emerging markets, as investment has been increasing all along. The main issue is the high targets set internally in China, which creates self-imposed pressure," said a former employee.

From market to sales, AstraZeneca's strategy in China has been known for its aggressive style. Relevant individuals cited the company's past respiratory business line as an example: to promote a pediatric asthma product, the company established numerous nebulization centers and marketed a disease management philosophy based on "lifelong use." "In fact, children have a possibility of self-healing as their immunity improves, and the idea of lifelong use of steroid drugs is not correct. However, it did achieve excellent market growth at the time." Yet, when this aggressive tradition faced slowing growth, KPI culture became even more frantic.

In 2023, from a regional revenue perspective, AstraZeneca's revenue in China reached $5.876 billion, a year-on-year increase of 7%, capturing a 13% share of the global market. In terms of the proportion of business in China, AstraZeneca remains the leader among multinational pharmaceutical companies; however, in terms of growth rate, the company's performance has raised alarms: during the same period, Merck saw a 32% increase in revenue in China, while later entrants like Novo Nordisk and Eli Lilly also achieved double-digit growth of 11%.

The performance decline has led to layoffs. "After being optimized by AstraZeneca, employees often feel that finding a new job is very difficult," said Luo Lan. "Firstly, coming from a department with issues makes companies hesitant to hire; secondly, AstraZeneca offers relatively high salaries, and now it’s an employer's market. Even if you say you're willing to accept a pay cut, employers still think you’ll leave after a pay cut, affecting your stability here."

At the same time, many of AstraZeneca's frontline representatives are from the post-90s and even post-00s generations, with short work experience and relatively low salaries and bonuses, leading to smaller severance packages and a greater tendency to seek rights through reporting and whistleblowing.

A former AstraZeneca representative, Chen Xiaoyu, told Southern Weekend reporters that large multinational pharmaceutical companies would not be foolish enough to rely on defrauding insurance funds for survival, as the risks are too high. However, sales department leaders might encourage representatives to engage in illegal activities to boost performance. "If something goes wrong, the representatives take the blame, while the sales managers get promoted if there’s no fallout."

Following Wang Lei's investigation, AstraZeneca China is currently temporarily taken over by global headquarters, with new compliance policies and requirements being issued. The company's overall business operation remains stable and has not been significantly affected. However, the entire industry is "watching" to see how AstraZeneca will resolve this situation.

As of the latest official reports, the personnel involved in the AstraZeneca medical insurance fraud case have not mentioned patients or doctors. However, this protracted "insurance fraud" case has yet to reach a conclusion.