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GSK staff 'confess to bribery', says China

Government claims staff offered kickbacks to state officials and doctors

China flag The Chinese government has accused GlaxoSmithKline (GSK) of taking part in widespread tax violations and the bribery of government officials and doctors.

The country's Ministry of Public Security also maintains that workers at the pharma company have already confessed to the allegations, which seems to relate to the probe into "economic crimes" which emerged earlier this month.

News of the investigation first emerged after police questioned staff at the company's operations in Changsha but, according to the government statement, the investigation has also extended to Shanghai and Zhengzhou.

The Ministry claims that the illicit behaviour it has uncovered is 'huge' and extended over a long period of time, and involved payments of bribes in order to open new sales channels and increase drug revenues in China.

The tax violations relate to activities such as the issuance of fake VAT receipts, according to a statement on the Ministry website, while company employees are also accused to using travel agents to issue fake documents used to gain cash and receiving kickbacks.

GSK has already carried out its own internal probe into the allegations of bribing doctors to prescribe drugs but concluded there was no wrongdoing. It added that the Ministry statement was the first official communication as to the nature of the investigation.

The company said: "We continuously monitor our businesses to ensure they meet our strict compliance procedures - we have done this in China and found no evidence of bribery or corruption of doctors or government officials.

"However, if evidence of such activity is provided we will act swiftly on it," it added. Last year the company paid $3bn to settle criminal and civil charges of healthcare fraud in the US.

GSK is among a group of around 60 pharma companies under scrutiny by the Chinese National Development and Reform Commission (NDRC) in a recently-launched inquiry into the production and distribution costs and prices of medicines sold on the domestic market.

Earlier this week, the company started an investigation into claims that sales staff gave cash incentives and other kickbacks to doctors in return for prescribing wrinkle treatment Botox (onabotulinumtoxinA).

12th July 2013

From: Sales

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