More GSK arrests in China over bribery

SALES TARGETS::Allegations against the employees of the British drugmaker based in Zhengzhou included bribing doctors with money and sexual favors to boost sales

Reuters, BEIJING

Sun, Jul 28, 2013 - Page 13

At least 18 more people have been detained in China in connection with a corruption scandal involving British drugmaker GlaxoSmithKline (GSK), state media reported, giving more details on a probe which has rocked the company.

State radio reported on its Web site late on Friday that police in the central city of Zhengzhou had “recently held, in accordance with the law, 18 GlaxoSmithKline (China) employees and some medical personnel.” It provided no details of the detentions.

The Zhengzhou police news department said by telephone they were “unaware of the situation” and declined to comment further.

GSK did not immediately respond to a request for comment.

Chinese police have previously announced the detention of four Chinese GSK executives in connection with allegations that the drugmaker funneled up to 3 billion yuan (US$489 million) to travel agencies to facilitate bribes to doctors and officials.

GSK has admitted that some Chinese executives appear to have broken the law, but chief executive Andrew Witty said on Wednesday that the head office had no knowledge of the alleged wrongdoing.

The official Xinhua news agency said that certain GSK employees are “suspected of offering bribes to doctors, asking them to prescribe more drugs in order to grow sales volume, and in the meantime pushing up drug prices.”

Xinhua cited an interview with a man surnamed Li, who it said was a regional sales manager for GSK responsible for selling respiratory drugs to more than 10 hospitals in Zhengzhou, who detailed how the corruption worked.

“They invited doctors to join high-end academic conferences to help the practitioners increase influence in their fields. They also established good personal relations with doctors by catering to their pleasures or offering them money, in order to make them prescribe more drugs,” Xinhua said.

“A 35-year-old female medical representative surnamed Wang, working under Li, said she entered doctors’ offices to act as their assistant and meet their needs as much as possible, even their sexual desires,” the report added.

“Wang said GSK China’s executives already knew this, and some executives gave clear directives to the sales department to offer bribes to doctors with money or opportunities to attend academic conferences.”

Many doctors got money even when the lectures did not actually exist, Xinhua said.

“Wang just forged lecture materials in order to obtain reimbursements from the company,” it added.

“According to Li and Wang, the company set the target of raising drug sales by 30 percent annually in the last two years, and the target can only be achieved by pushing doctors to prescribe more if there are no increases in the number of patients,” Xinhua reported.

GSK this week appointed one of its top European executives as the new head of operations in China.