GSK fined record £297m over Chinese bribery

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A Chinese court has fined British drugs giant GlaxoSmithKline a record £297 million for bribing doctors and hospitals to use its products.

Glaxo said it accepted the decision by the Changsha Intermediate People’s Court in Hunan province and added that it has already taken steps to change its working practices.

The courts imposed a three-year suspended sentence and a deportation order on former Glaxo country manager Mark Reilly in connection with the case.

The authorities have been looking into allegations that staff of the UK-headquartered group funnelled hundreds of millions of pounds through travel agencies to bribe doctors and health officials.

Glaxo, which had sales of more than £11 billion in the first half of this year. said it would change its incentive programme for its sales forces, reduce and alter activities with healthcare professionals and more closely monitor invoices and payments.

Chief executive Sir Andrew Witty said: “Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK.

“We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country.”

Glaxo also issued an apology to the Chinese people. It said: “GSK fully accepts the facts and evidence of the investigation, and the verdict of the Chinese judicial authorities. Furthermore, GSK sincerely apologises to the Chinese patients, doctors and hospitals, and to the Chinese government and people. GSK deeply regrets the damage caused.”

Local news agency Xinhua said because Reilly had been sentenced to be deported, it might mean he was sent out of China before he would have to serve prison time.

He was sentenced alongside four Chinese GSK defendants – Steven Liang, April Zhao, Gary Zhang and Delia Huang – who were also given suspended sentences. All five defendants pleaded guilty to charges relating to the bribery of doctors and hospitals in China.

Reilly had returned to China last year after the scandal came to light, to help Chinese authorities with their investigation.

Although he is no longer country manager in China, he remains a Glaxo employee.

The group said it remained committed to its involvement in China.

Witty added: “We will also continue to invest directly in the country to support the government’s health care reform agenda and long-term plans for economic growth.”

Last month, British investigator Peter Humphrey and his American wife Yingzeng Yu, who were hired by Glaxo in China, were sentenced for illegally collecting private information. Humphrey was jailed for two and a half years and fined £20,000 along with subsequent deportation. Yu was sentenced to two years in prison and a £15,000 fine.