Glaxo still rising despite corruption probe

Sir Andrew Witty blamed a handful of senior managers
Sir Andrew Witty blamed a handful of senior managers
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DRUGS giant GlaxoSmithKline yesterday revealed that a corruption probe in China has sent sales of pharmaceuticals and vaccines in the country plummeting 61 per cent.

The maker of Aquafresh, Panadol and Sensodyne said pre-tax profits fell by 6 per cent to £1.4 billion during the three months to 30 September.

Glaxo has been under pressure since it emerged during the summer that Chinese authorities are investigating bribery by its staff – which allegedly saw millions of pounds paid to doctors and health officials to boost sales and raise prices.

Chief executive Sir Andrew Witty has previously labelled the scandal “shameful” but blamed it on a handful of senior managers who were “acting outside our processes”.

Glaxo saw pharmaceuticals and vaccines sales in China slump to £77 million during the quarter as Chinese authorities continue their investigation. The group typically makes 3-4 per cent of its full-year sales in China.

Glaxo said: “We continue to co-operate with the authorities and we remain fully committed to supplying our products to patients in the country. At this stage, it is still too early for us to quantify the longer-term impact of the investigation on our performance in China.”

The company has informed Britain’s Serious Fraud Office as well as the US department of justice and the US Securities & Exchange Commission.

Despite the Chinese probe, group sales grew 1 per cent to £6.5bn and Glaxo confirmed its target for 1 per cent full-year sales growth and a 3-4 per cent increase in earnings per share.