Drugs firm executives accused of bribery
By Ding Yining |
July 12, 2013, Friday
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Print Edition
Print Edition
CHINA'S Ministry of Public Security yesterday accused executives of pharmaceutical supplier GlaxoSmithKline 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 agencis to government officials, medical industry associations and foundations, hospitals and doctors "to open new sales channels and increase drug revenues," a ministry announcement said.
The GSK executives are also suspected of tax offenses involving collusion with travel agencies to issue false invoices, the ministry said. It 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.
The company's China operations are currently the subject of a joint investigation by police in Shanghai, Changsha in south China's Hunan Province, and Zhengzhou in central Henan Province.
The operation was first revealed at the end of last month when Changsha police confirmed they were investigating GSK staff for economic crimes.
GSK said it was cooperating with the authorities but didn't say how many of its staff were being questioned.
"We take all allegations of bribery and corruption seriously and will act swiftly if evidence of such activity is provided," it said in a statement.
The nationalities of the GSK executives under investigation is not known.
An employee at the ministry press office said she could not release the drug company employees' names or other details because they had not been charged with a crime.
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.
Its probe followed allegations from a whistleblower of widespread cash payments and speaking fees being given to doctors to induce them to prescribe GSK products, according to a Wall Street Journal report.
Doctors have a major say about what kind of prescription drugs to give to patients and sales from hospitals account for at least 70 percent of overall drug sales in China, according to Sinohealth Intelligence.
GSK entered the Chinese market in 1987 when it formed the Tianjin Smith Kline & French Laboratories Ltd with Tianjin Zhongxin Pharmaceuticals and Tianjin Taiping (Group) Co Ltd.
The UK drug maker operates a global research and development center in Shanghai and six manufacturing sites throughout China with total investment exceeding 500 million yuan (US$80.6 million).
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