British pharmaceutical giant GlaxoSmithKline has been accused by Chinese police of a massive bribery network run covertly with travel agencies, the New York Times reports.
The agencies were used to funnel millions of dollars to doctors, hospitals, and officials, authorities told a press conference today. The aim of these payoffs was to keep sales of GSK products high and allow the firm to raise prices in China. According to the Reuters, the value of the bribes was said to be over $450 million since 2007.
The company is even accused of organizing fake conferences to account for the money. Travel agents keen to work with GSK are also alleged to have hired young women for GSK executives in what authorities called "sexual bribery."
The investigation against GSK was announced last week, and Chinese state news agency Xinhua reports that four senior executives at GSK are being held for "serious economic crimes." According to the New York Times, Mark Reilly, the head of GSK’s operations in China, recently left the country. His departure coincided with a number of raids of the company's offices.
Officially, GSK has released a statement saying it will cooperate with the investigation.
The allegations against GSK first came to light in the Wall Street Journal earlier this year. An anonymous tipster sent the newspaper emails and documents from between 2004 and 2010 which appeared to show sale staff bribing doctors with speaking fees and lavish perks if they prescribed the company's products.
Speaking at the conference today, Gao Feng, head of the economic crimes investigation unit at China's Ministry of Public Security, made an ominous warning to other foreign pharmaceutical firms in China.
"Whether they were engaged in illegal behavior, you can go interview them," Feng said, according to Reuters. "You just need to ask them one question: Are you sleeping well at night?"
Join the conversation about this story »
     |