China accuses British execs over GSK bribing scandal

The Chinese police have accused a British GlaxoSmithKline (GSK) executive and his colleagues of having bribed hospital and government officials to prescribe the company’s drugs, running a “massive bribery network”.

Mark Reilly, GSK’s former head of China operations, and two colleagues have been said to run a “massive bribery network” in China, paying doctors and health institutions to use GSK drugs.

They are also accused of having bribed government officials in Beijing and Shanghai, police said.

The move would have resulted in massive profits for the British pharmaceutical firm, considering that GSK products are sold at a very high price compared to similar ones in other nations.

Reilly was replaced when the investigation began last year and left the country, but he is said to have returned to China. The firm said it is available to cooperate and will give full support to investigators.

GSK came under scrutiny in July last year, when it was alleged that up to 3 billion yuan (£300m) to bribe doctors and officials were traded through travel agencies. The allegations caused a 61% fall in sales of the company’s products.

The firm faces similar accusations in Poland, with other alleged cases in Iraq, Jordan and Lebanon. Eleven doctors and a GSK regional manager have been charged with corruption between 2010 and 2012 in Lodz, Poland, in relation to the prescription of asthma drug Seretide.

Despite the bribing scandals, GSK remains a top choice for ethical investors, with shares only dropping by 0.26%. Mike Appleby from Alliance Trust previously said that they would continue trusting GSK, as long as it is committed to cleaning up its act.

Photo: Norio NAKAYAMA via Flickr

Further reading:

GlaxoSmithKline replaces head of Chinese arm amid corruption allegations

We’ll invest in GlaxoSmithKline for as long as it’s 100% committed to cleaning up its act

Responsible investors react to GlaxoSmithKline bribery allegations

GlaxoSmithKline accused of bribing doctors to boost sales

GlaxoSmithKline China sales take a hit following bribery scandal