GSK: Bribery allegations 'appear' to be true

Following a meeting with Chinese officials, GlaxoSmithKline admits some of its executives 'appear' to have broken Chinese law.

by Emma Haslett
Last Updated: 05 Sep 2013
Another chapter in the epic trilogy that is bribery allegations by Chinese police against GlaxoSmithKline: the British drug company has admitted some of its executives ‘appear’ to have ‘breached Chinese law’. When is a confession not a confession? When it only ‘appears’ to be one…

The company has changed its tune since a fortnight ago, when GSK said an internal investigation had found ‘no evidence’ of bribery or corruption – although it added at the time that it would act if it received evidence. From that, we can deduce that evidence has been forthcoming.

The statement came after officials from the company met with the Chinese Ministry of Public Security over allegations that the company had bribed Chinese doctors with cash and gifts if they prescribed certain medicines. Bizarrely, it is accused of using travel agents as intermediaries (although some allegations are ‘of a sexual nature’).

‘We have had a very constructive meeting with the Ministry… and are grateful for their time,’ said GSK a spokesperson, presumably through gritted teeth.

Nevertheless, it’s a step forward in the investigation, which became serious when five GSK execs – including finance director Steve Nechelput – were prevented from leaving the country.

GSK says it has also agreed to cut the price of its drugs in China by changing its model, which will lower costs. It’s a sign the company is keen to mend relations with an economy that, while it only accounts for 3% of sales at the moment, is likely to take up an ever-increasing slice of GSK’s sales pie in the not-too-distant future.

At least it can take solace in the fact that it is not the only drug company accused of dirty dealings: AstraZeneca said this morning that police had visited its Shanghai office and detained one employee for questioning.  

All this investigating is presumably supposed to warn western companies that bad behaviour will no longer be tolerated. UK firms with ambitions to cash in on one of the world’s fastest-growing economies: take note…

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