Bribery by GSK China was coordinated at company level: Xinhua

Tue Sep 3, 2013 7:35am EDT
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SHANGHAI (Reuters) - A Chinese police investigation into drugmaker GlaxoSmithKline has discovered that alleged bribery of doctors in China was coordinated by the British company and was not the work of individual employees, state media reported on Tuesday.

Police in July detained four senior Chinese executives at GSK over allegations the company funneled up to 3 billion yuan ($490 million) to travel agencies to facilitate bribes to doctors and officials to boost the sale of its medicines.

"It is becoming clear that it is organized by GSK China rather than ... sales people's individual behavior," the official Xinhua news agency reported.

GSK said the issues identified in the Xinhua report would be a "clear breach of our corporate values" and it shared the desire of the Chinese authorities to root out corruption.

"We remain deeply concerned by the allegations of fraudulent behavior and ethical misconduct in our China business," a company spokesman said.

The company has said previously that some of its senior Chinese executives appear to have broken the law, and that it has zero tolerance for bribery.

The GSK investigation is one of several into China's pharmaceutical sector. Others have focused on how drugmakers price their medicines in the world's second-largest economy.

Xinhua quoted Huang Hong, general manager for GSK's business operations in China and one of the detained executives, as saying the company had set goals for annual sales growth as high as 25 percent. That rate was 7 to 8 percentage points above the average growth rate for the industry, Huang said.

GSK implemented salary policies based on sales volumes and such goals could not be achieved without "dubious corporate behavior", Huang said.   Continued...