Date
17 December 2017
The bribery case against GlaxoSmithKline could serve as a stern warning to multinational companies doing business in China. Photo: Bloomberg
The bribery case against GlaxoSmithKline could serve as a stern warning to multinational companies doing business in China. Photo: Bloomberg

GSK China chief accused of ordering bribery

China has accused the GlaxoSmithKline Plc of earning billions of renminbi in “illegal revenues” in the country through “massive and systematic” bribery, ending a 10-month-long corruption probe into the British pharmaceutical giant, the Financial Times reported Wednesday.

Police handed over the case to prosecutors, after identifying 46 suspects, including the firm’s China manager and British national Mark Reilly, the official Xinhua News Agency said.

The Wall Street Journal said the move could serve as a stern warning to multinational companies doing business in China that the government led by President Xi Jinping is ready to use a heavy hand against foreign executives that violate the law as it seeks to stamp out pervasive corruption and bribery in the world’s second economy.

Police said Reilly ordered his sales teams to bribe hospitals, doctors, other medical institutions and organizations through various means to boost sales and squeeze out rival companies, according to Xinhua.

Reilly adopted multiple measures to encourage the marketing staff to focus on sales and disregard regulations, according to China Business News. Incentives as high as 400,000 yuan (US$64,220.3) were granted those who achieved sales goals while those who did not were sacked or unable to get promotions, the report said.

A doctor at a Hunan hospital and one of the suspects in the case told Xinhua that in March 2012, a GSK sale representative offered him 20 yuan for every box of Heptodin he prescribed and 100 yuan for every new patient who started using the drug. Heptodin is used to treat Hepatitis B.

The doctor identified as Li normally prescribed 150 to 200 boxes of Heptodin and recruited five to eight new patients each month, which brought him about 4,800 yuan of extra income, the report said. The GSK representative would register the expense as payment for Li lecturing in the company’s training programs.

Another way to bribe doctors is to cover their expenses when attending medical seminars, the report said.

According to company data, GSK’s sales in China grew to 6.9 billion yuan in 2012 from about 3.9 billion yuan in 2009.

During the bribery investigation, the British firm’s sales of drugs and vaccines in the country dropped 61 percent in the third quarter last year.

The company said in December last year it has stopped paying doctors to promote its products and scrapped sales targets for its marketing staff. It also said it will stop paying health care professionals to attend medical conferences.

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TL/AC/CG

 

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