monday, 22 september of 2014

China fines GlaxoSmithKline US $489 million for bribery

GlaxoSmithKline (GSK), the British pharmaceutical giant, was on Friday fined US $489 million, the biggest-ever penalty given by a Chinese court, for bribing doctors in China to boost sales.

The Changsha Intermediate People's Court in central China's Hunan Province imposed a fine of 3 billion yuan (US $489 million) on the Chinese branch of GSK while sentencing its manager, a British national, to three years in prison.

Following Friday's closed-door trial of the bribery case involving GSK China, the court ruled the firm was guilty of bribing personnel in the business and imposed the fine, China's offocial Xinhua news agency reported.

GSK China, resorted to bribery to boost sales of its medical products and sought benefits in an unfair manner, the court said in a statement. (The firm) bribed, in various forms, people working in medical institutions across the country, and the amount of money involved was huge.

Five senior executives actively organised, pushed forward and implemented sales with bribery, it said.

Among the five, Mark Reilly, a British national and former manager of GSK China, has been given three years with a four-year reprieve and will be expelled from China.

Another three, namely, former Human Resources Director Zhang Guowei, former VP and Operations Manager Liang Hong and former Legal Affairs Director Zhao Hongyan, were given two to three years with reprieves ranging from two to three years.

Following the verdict, the drug firm posted an apology on its Chinese website, saying that it "fully accepts the facts and evidence of the investigation and the verdict of the Chinese judicial authorities."

GSK sincerely apologises to the Chinese patients, doctors and hospitals, and to the Chinese Government and the Chinese people and deeply regrets the damage caused, the company said in its apology.

It also apologised for harm caused by its illegal private investigation.

The apology described the events as clear breach of GSK's governance and "wholly contrary to the values and standards we expect from our employees."

"The company will continue to invest in China and support research. It will continue to develop new medicines in China and increase access to its products in rural areas "through greater expansion of production and through price flexibility," the statement added.

(Published by Business Today - September 19, 2014)

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