Glaxo CEO: Unaware of accused executives' behavior in China

Posted: July 26, 2013

GlaxoSmithKline chief executive officer Andrew Witty said Wednesday that he and other top leaders at company headquarters in London were unaware of the activity of GSK executives in China accused of using travel agencies to pay off doctors and other health-care providers to increase drug sales.

"To see these allegations about people working for GSK is, as we've said, shameful," Witty said in a conference call with reporters, his first public comment since the scandal broke.

"For me, personally, they are deeply disappointing," he said. "These allegations are totally contrary to our values. Outside and inside the company, people rightly expect us to operate with integrity. To be crystal clear, we have zero tolerance for this kind of behavior. We are absolutely committed to rooting out corruption."

Glaxo has operations in Philadelphia and other towns in this region.

Separately, London-based AstraZeneca, which has operations in Wilmington, said Wednesday that two of its China managers had answered questions related to one of the company's sales representatives. A company spokesman said that it appeared to be "a local police matter," related to the individual, and that AstraZeneca tries to operate with integrity.

A spokesman for Merck & Co. said it no longer uses Shanghai Linjiang International Travel Agency, which has been mentioned in the GSK investigation. The spokesman declined further comment.

China's official Xinhua news agency said Wednesday in a commentary published on its English website that the government was trying to tackle "rampant" malpractice in the pharmaceutical sector, including corruption in Chinese companies.

"One thing is clear, the chaos of medicine trade should not, by any means, be an excuse for multinationals to resort to bribery, price-fixing and other malpractice," the commentary read. "It will not be surprising if more pharmaceutical companies and hospitals, domestic or international, are to be involved in probes in the days to come."

Witty made his comments as Glaxo released second-quarter financial results. Glaxo sales rose from $10.1 billion in 2012's second quarter to $10.2 billion in the same period of 2013. After-tax profit increased from $1.61 billion to $1.67 billion.

It is too early to measure the investigation's impact on China sales, he said.

"It is clear to me that we are at an inflection point in what the Chinese marketplace is likely to look like in the future," Witty said, "not the least because of the Chinese government's desire to ensure its health-care system keeps up with the evolution of the country and the growing wealth across the country."


Contact David Sell at 215-854-4506, dsell@phillynews.com, or @phillypharma. Read his blog at www.inquirer.com/phillypharma.

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