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GSK blamed for employee bribes in China

Xinhua news agency claims company was complicit in the payment of kickbacks to doctors

GSK GlaxoSmithKline house

GlaxoSmithKline (GSK) was directly responsible for the actions of its employees in China who stand accused of bribery, according to the Xinhua news agency.

GSK has said in the past that executives linked to the payment of kickbacks to doctors had been operating outside its operating practices, but in an escalation of the scandal the company is now accused of being complicit in the activities.

The article in Xinhua states that "it is becoming clear that it is organised by GSK China rather than drug salespeople's individual behaviour". Back in July four executives at the pharma company were detained over claims that some 3bn yuan ($490m) had been funnelled to doctors and healthcare officials via a network of middlemen including travel agents.

The newswire alleges that GSK set aside a "public relations" fund of about 10m yuan ($1.6m) apiece for sales teams targeting large customers, which was used to maintain "close ties" with key staff in hospitals.

It also cites Huang Hong, former general manager for GSK's business operations in China and one of the four executives detained by police, as saying the company set aggressive growth targets for its sales teams of up to 25 per cent - 7 to 8 points above the average pharma industry growth rate.

The targets would not be possible to meet without "dubious corporate behaviour", Huang told the news agency.

GSK is remaining tight-lipped as the investigation continues to play out in the media, but in a prepared statement said it remains "deeply concerned by the allegations of fraudulent behaviour and ethical misconduct in our China business".

The allegations made in the Xinhua report "would be a clear breach of our corporate values and we have zero tolerance for any behaviour of this nature", said the company, which reiterated its cooperation with the Chinese authorities during the investigation.



Article by
Phil Taylor

4th September 2013

From: Sales, Regulatory



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