GSK managers accused of bribery
July 15, 2013 Category Foreign investment, Weekly
The Ministry of Public Security accused executives of pharmaceutical supplier GlaxoSmithKline (GSK) of conducting a large, long-running bribery campaign to expand the UK company’s market and raise the price of its medicine by persuading doctors to prescribe its products. The suspects are believed to have offered large bribes laundered through travel agencies to government officials, medical industry associations and foundations, hospitals and doctors “to open new sales channels and increase drug revenues,” the Ministry said. The GSK executives are also suspected of tax offenses involving collusion with travel agencies to issue false invoices. The Ministry of Public Security identified the employees as “high officials” of GSK but gave no details of the size of payments or who received them. “After questioning, the suspects confessed to the crime,” the Ministry statement said. Doctors have a major say about what kind of prescription drugs to give to patients and sales from hospitals account for at least 70% of overall drug sales in China, according to Sinohealth Intelligence. GSK’s China operations are currently the subject of a joint investigation by police in Shanghai, Changsha in Hunan, and Zhengzhou in Henan province. GSK said it was cooperating with the authorities but didn’t say how many of its staff were being questioned. The nationalities of the GSK executives under investigation are not known. Last month, GSK said it found no evidence of corruption or bribery in its Chinese business after an internal investigation which had lasted several months. GSK entered the Chinese market in 1987 when it formed the Tianjin Smith Kline & French Laboratories with Tianjin Zhongxin Pharmaceuticals and Tianjin Taiping (Group) Co. The UK drug maker operates a global research and development center in Shanghai and six manufacturing sites throughout China with a total investment exceeding CNY500 million, the Shanghai Daily reports.
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