GSK Bribery in China Coordinated at High Level?
September 3rd, 2013 // 3:29 pm @ jmpickett
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The version of events that we are seeing from GlaxoSmithKline on the very embarrassing bribery mess in China is getting a lot of questions. The most recent confusion is coming from a report from the news agency Xinhua, where Huang Hong, general manager of GSK operations in China, is claiming that the company shifted blame and responsibility onto sales reps as the investigation gathered steam.
The investigation by the police indicated that the GSK unit in that country went through some lackluster internal audits so that the crimes would not be noticed, the report stated, which did an interview of Hong. He said that GSK set sales goals for each year that were as high as 25%, which is about 8% above the industry average. This could not be done without unethical behavior, Hong said.
He is implying that some high up executives in the company in China were coordinating the entire bribery scheme. As we have reported before, GSK employees are being accused of paying over $400 million in bribes to medical professionals and officials in government. They also are believed to have used travel companies to do conferences to funnel some money in the hope of increasing prescriptions for some drugs.
GSK CEO Andrew Witty is on the record called the entire mess ‘shameful’ and he blamed certain individuals who operated out of the control of the company. A few days earlier, the GSK president of international operations issued a statement that said that some senior executives were acting out of the control of the company, which were violations of the law in China.
In the coming days, there will be a lot of debate about which in the top management knew about this bribery scandal. But these new accusations from Hong, who was one of the GSK employees that was held by the police, suggests that there was a larger effort at high levels of management to boost business.
This is not the first time we have seen different versions of what happened over there. GSK originally insisted that its internal probe that was raised by an anonymous person did not find any signs of wrong doing. The firm restated this stance before the big accusation from Chinese government officials that GSK is similar to a crime boss.
Sales reps were told to establish good rapport with doctors; one rep, who was a female and 35, said that she would go into the doctor’s office and pretend to be their assistant and meet ALL of their needs, including sexual ones. She also stated that GSK execs in China knew and gave orders to bribe medical professionals with money and trips to conferences.
This scandal is unfolding as GSK and other companies in China are trying to expand their drug manufacturing and sales operations. China accounts only for 3.5% of revenue for the company, but sales increased by 17% in 2012, and the firm now has 17,000 people there working at manufacturing plants and at an R&D plant.
