[Ip-health] GlaxoSmithKline accused of being 'ringleader' in massive China drug sales bribery scandal

Riaz K Tayob riaz.tayob at gmail.com
Mon Jul 15 12:41:54 PDT 2013

  GlaxoSmithKline accused of being 'ringleader' in massive China drug
  sales bribery scandal

Lucy Tobin 

Monday 15 July 2013

Chinese police
today accused GlaxoSmithKline of being the "ringleader" in a massive bribery
scandal over drugs sales, involving as many as 700 middlemen and some 3 
yuan in bribes over the last six years.

Four GSK executives have been detained amid allegations they bribed 
Chinese officials, doctors and hospitals to illegally boost sales and 
raise the price of medicines, police said. They also claimed GSK 
employees received bribes "of a sexual nature" as well as cash bribes 
from middlemen travel companies.

"We found that bribery is a core part of the activities of the company," 
said Gao Feng, head of the economic crime investigation division of 
China's Ministry of Public Security. "To boost their prices and sales, 
the company performed illegal actions."

The four detainees are Chinese nationals employed as GSK and are China's 
head of compliance, the vice president in charge of operations, the 
commercial development manager and the human resources director, Gao 
said. He added that the British head of Glaxo's business in China, Mark 
Reilly, had left the country on June 27, after the probe was announced, 
and has not returned,

"You better ask him yourself why he has left China and is not willing to 
return so far," Gao said. "We did not take any measures to stop his 
departure." He added that Chinese investigators had not "received any 
information from the UK headquarters" and said: "This is a very serious 
violation and a high profile case, we are wondering why we have not yet 
received any information".

Glaxo responded that it was "deeply concerned and disappointed by the 
serious allegations." A spokesman added: "Such behaviour would be a 
clear breach of GSK's systems, governance procedures, values and 
standards. GSK has zero tolerance for any behaviour of this nature. GSK 
shares the desire of the Chinese authorities to root out corruption. We 
will cooperate fully with the Chinese authorities in the investigation 
of these new allegations. We are reviewing all third party agency 
relationships.  We have put an immediate stop on the use of travel 
agencies that have been identified so far in this investigation and we 
are conducting a thorough review of all historic transactions related to 
travel agency use.

"GSK fully respects the laws and regulations in China and expects all 
staff to abide by them."

The comments came as Gao said: "Just like criminal organisations always 
have a ringleader, in this criminal scheme GSK is the ringleader. We 
have also found some clues about similar activities by other foreign 
pharmaceutical companies, but we haven't ascertained whether these were 
illegal activities."

It is understood Reilly returned to the UK for a planned business 
meeting, but is now staying here to work with Glaxo's China leadership 
team from afar, as well as with management in the UK.

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