GSK regrets ‘shameful’ bribery claims

Chinese police have accused GlaxoSmithKline of channelling bribes to Chinese officials and doctors through travel agencies to boost sales illegally and raise the price of its medicines.

The drugs giant yesterday expressed regret over “shameful” alleged bribery.

Gao Feng, head of the economic crimes investigation unit at China’s Ministry of Public Security, said that since 2007, GSK had transferred as much as 3bn yuan (€375m) to over 700 travel agencies and consultancies over six years.

Four senior Chinese executives from GSK had been detained, Mr Gao said. The Ministry of Public Security had said last week that GSK executives in China had confessed to bribery and tax violations.

GSK said it was deeply concerned by the developments and had stopped using the travel agencies identified by the investigation. It said it was reviewing all third-party agencies and all historic transactions related to the travel agencies.

“GSK shares the desire of the Chinese authorities to root out corruption,” it said. “These allegations are shameful and we regret this has occurred.”

The company said it would also review compliance procedures in the country, adding that it fully respected laws and regulations in China and expected all staff to abide by them.

“We also fully support the efforts of the Chinese authorities in their reforms of the medical sector and stand ready to work with them to make the necessary changes for the benefit of patients in China.”

GSK supplies key products such as vaccines in China, as well as drugs for lung disease and cancer.

The probe into Britain’s biggest drug maker is one of a string of investigations into foreign firms and their pricing practices in the world’s second-biggest economy.

The People’s Daily said GSK collaborated with travel agencies to funnel bribes to doctors and officials by creating fake “conference services” as expenditure for GSK to misappropriate funds, some of which would be spent on bribes.

“We have sufficient reason to suspect that these transfers were conducted illegally,” Mr Gao said.

“You could say the travel agencies and GSK were criminal partners. Among the partners, GSK was mainly responsible. In a criminal organisation, there is always a leader.”

He said there were also instances of “sexual bribery”, although he did not elaborate.

He said police had uncovered information that pointed to similar money transfers made by other multinational pharmaceutical companies in China.

He did not name any other foreign companies.