Drug maker GlaxoSmithKline has been fined $492 million for bribing doctors and health officials in China. The Chinese court also sentenced the company’s former China manager, Briton Mark Reilly, and four Chinese co-defendants to prison. These sentences have been postponed, however, because ‘the defendants confessed’. The fine is the largest such penalty ever imposed by a Chinese court and stems from an allegation that almost half a billion dollars was channelled through a travel agency for use by GSK sales people.
Reilly was accused by police of operating a “massive bribery network.” He allegedly ordered GSK sales teams to pay doctors, hospital officials and health institutions to use GSK’s drugs.
Glaxo has already stated it will pay the fine. It has also stated that it will review its incentive schemes and reduce its involvement with healthcare professionals.
“We have and will continue to learn from this,” said CEO Sir Andrew Witty in an official statement. Glaxo has previously stated that the actions, which apparently started in 2009, took place without its knowledge.
We have previously reported that a private investigator, Briton Peter Humphrey had been jailed in China. Hired by GSK, he was accused of illegally trafficking personal data. GSK said Humphrey was hired to look into a security breach, not bribery. But apparently Humphrey had reported that the bribery allegations were true.
However, GSK announced in June 2013 that a four-month investigation of bribery allegations had found no wrong doing.
GSK paid the largest ever fine of $3 billion for similar offences in the USA and still faces similar charges in other countries such as Poland and Jordan.
Other drug companies now face similar scandals in China.