GSK Fined in China Bribery Scandal

September 19, 2014
BioPharm International Editors

GSK is found guilty of offering bribes to doctors and is fined $489 million.

A court in China has found GlaxoSmithKline’s China Investment Co. Ltd. guilty of bribing doctors to use the company’s drugs and has imposed a fine of $489 million (3 billion yuan). China’s Ministry of Public Security initiated an investigation in June 2013. 

The fine will be funded through existing cash resources, GSK reports in a statement.  Associated costs and charges related to restructuring will be included in the company’s third quarter update.

In a statement, GSK announced the fine and reported; "The illegal activities of GSKCI are a clear breach of GSK’s governance and compliance procedures; and are wholly contrary to the values and standards expected from GSK employees. GSK has published a statement of apology to the Chinese government and its people on its website (www.gsk-china.com)."

GSK also reported that the company has cooperated with the authorities and has taken steps to rectify the issues identified at the operations of GSKCI including changing the incentive program for its salesforce; reducing and changing engagement activities with healthcare professionals; and expanding processes for review and monitoring of invoicing and payments.

"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 and its people. We will continue to expand access to innovative medicines and vaccines to improve their health and well-being. 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," said GSK Chief Executive Officer, Sir Andrew Witty in a statement.

Source: GlaxoSmithKline