China says Glaxo officials bribed doctors to boost sales

Glaxo's London headquarters . The company said it would cooperate with a probe but said a previous inquiry found no wrongdoing. SIMON DAWSON / Bloomberg News
Glaxo's London headquarters . The company said it would cooperate with a probe but said a previous inquiry found no wrongdoing. SIMON DAWSON / Bloomberg News
Posted: July 13, 2013

BEIJING - China's police ministry accused executives of the pharmaceutical supplier GlaxoSmithKline on Thursday of conducting a large, long-running bribery campaign to persuade doctors to prescribe drugs.

Glaxo employees are accused of paying "large bribes" laundered through travel agencies to doctors, hospitals, and others to "open new sales channels and increase drug revenues," said a Public Security Ministry announcement. It said the scheme "lasted a long time" but gave no details.

They also are suspected of tax offenses involving collusion with travel agencies to issue false invoices, the ministry said. It identified the employees only as "high officials" of British-based Glaxo and gave no details of the size of payments or who received them.

"After questioning, the suspects confessed to the crime," the statement said.

Glaxo said it would cooperate with the authorities but said Thursday's announcement was the first official communication it had received about the investigation.

"Corruption has no place in our business," a company statement said. "If evidence of such activity is provided we would of course act swiftly on it."

An employee of the police ministry press office who would give only her surname, Wang, said she could not release the employees' names or other details because they have not been charged with a crime.

Police in Changsha announced two weeks ago that Glaxo employees had been detained for questioning about unspecified "economic crimes." Thursday's statement said the investigation also took place in Shanghai and Zhengzhou.

GlaxoSmithKline said in June that it had investigated an accusation that its salespeople in China bribed doctors and found no evidence of wrongdoing. The company has said the police investigation might be based on information from the same anonymous source.

GlaxoSmithKline P.L.C. has headquarters in Britain but has a presence in the United States, including facilities in Philadelphia, which could make it liable to penalties under U.S. anti-bribery laws.

Glaxo's U.S. shares rose 1.2 percent, or 62 cents, to close at $52.91.

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