China says GSK executives have confessed to bribing doctors
UK drugs maker GlaxoSmithKline under fire after executives in China confess to ‘serious economic crimes’ to boost revenue
Executives working for the UK drug maker GlaxoSmithKline in China have confessed to “serious” corruption and tax-related offences, China’s security ministry said on Thursday, amid a wide-ranging series of investigations into foreign firms operating in the country.
The allegations, which the ministry classified as “serious economic crimes”, include the bribing of doctors and officials in order to “open new sales channels and increase drug revenues”. The employees are also claimed to have used fake receipts to violate tax regulations, according to a statement on the ministry’s website. It did not reveal the employees’ identities, how many were detained or when they were questioned.
“After initial questioning the suspects have admitted to the crimes, and the investigation is ongoing,” the statement said, adding that police were carrying out investigations in Shanghai, Zhengzhou and Changsha, where GSK employees – whose identities have not been revealed – were detained two weeks ago on charges of fraud.
A spokesman for GSK rejected the charges, saying: “We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures. We have done this in China and found no evidence of bribery or corruption of doctors or government officials. However, if evidence of such activity is provided we will act swiftly on it.”
He added: “We are willing to co-operate with the authorities in this inquiry. But this is the first official communication GSK has received from the PSB [public security bureau] in relation to the specific nature of its investigation.”
A spokesman for the Foreign Office said: “We are aware of the Chinese investigation and we are in contact with GSK and the Chinese authorities.”
The allegations follow similar claims that GSK sales staff in China showered doctors with money, dinners and all-expenses paid trips in promoting its Botox anti-wrinkle treatment.
The Botox allegations, reported in the Wall Street Journal following a tip-off from an anonymous source, centred on claims that GSK marketing staff in China had planned to pay doctors up to $490 (£325) for meeting prescription quotas between 2004-2010.
There is no evidence any payments were made and GSK’s spokesman said the company had looked thoroughly at these allegations and had found nothing.
GSK’s sales in China account for 3% of the group’s turnover, but are expected to grow.
The allegations come as Beijing conducts a series of investigations into foreign companies across an array of industries. European and US-based companies Mead Johnson, Nestle and Danone have cut their infant milk formula prices in recent days amid a major government investigation into alleged price fixing. Earlier this year Chinese media targeted Apple and Volkswagon in scathing consumer rights investigations.