GlaxoSmithKline apologises as it's given a £300m fine for bribery in China

The UK pharmaceutical company has been embroiled in a bribery scandal for the past year.

by Elizabeth Anderson
Last Updated: 18 May 2015

GlaxoSmithKline has been fined a record 3bn yuan (£297m) after a Chinese court found the British drug giant had paid as much as £300m in bribes to doctors and hospitals to use its products, with payments dating back from 2007.

Mark Reilly, the former head of GSK’s China operations, was given a three year prison sentence - suspended for four years - and will be deported. Other GSK staff have also been sentenced, according to state news agency Xinhua.

The guilty verdict was announced yesterday at a court in the central Chinese city of Changsha, following a year-long investigation into bribery allegations at GSK's Chinese business.

'GSK sincerely apologies to the Chinese patients, doctors and hospitals, and to the Chinese Government and Chinese people...The illegal activities of GSKCI are a clear breach of GSK plc's governance and compliance procedures; and are wholly contrary to the values and standards we expect from our employees,' the firm said in a statement.

It said it remained committed to China – a huge and growing market for pharmaceutical companies – and promised to become a 'model for reform in China's healthcare industry'.

The investigation was prompted after a sex tape featuring Mark Reilly was leaked in March 2013, sparking the interest of the Chinese government. It turned into the biggest corruption scandal to hit a foreign company in China since the Rio Tinto affair in 2009, where four executives were jailed for between seven and 14 years for bribery and espionage.

The UK's Serious Fraud Office and the US department of justice is also conducting a criminal investigation into the drugmaker's sales practices around the world, which could result in GSK being hit with further fines.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today