Chinese police have accused a British GlaxoSmithKline executive of ordering his staff to bribe hospital officials to use its medical products.
Mark Reilly, the former head of Glaxo’s China operations, was the first foreign employee to be implicated in China’s allegations against the pharmaceutical company. Two Chinese staff members have also been accused.
In a statement carried by the official Xinhua News Agency, police in the central city of Changsha said Reilly was accused of pressing his sales team to bribe doctors, hospital officials and health institutions. There are also allegations of bribes to government officials.
Chinese authorities announced last July that they were investigating Glaxo and detained four Chinese executives
At a news conference today, the investigators said the drugs maker had earned millions in what it called “illegal revenues” in China because the cost of the alleged bribes was passed directly on to Chinese consumers. They said the cost of the drugs sold by Glaxo in China was much higher than similar drugs sold in other countries.
The results of the probe are now before the Changsha prosecutors' office.
Glaxo has apologized to China for actions by employees that it said were outside of its internal controls, but denied that that it benefited to the tune of millions of dollars, as China claimed today.
In a statement on its website, the company said it takes the allegations that have been raised “very seriously.”
“They are deeply concerning to us and contrary to the values of GSK," the statement said.
China has conducted a wide-ranging probe of pharmaceutical marketing practices in China and companies are vulnerable to losing access to the huge market.
Glaxo is also facing a criminal investigation into similar allegations in Poland.
In a statement yesterday, Glaxo said it plans a new compensation system, to be implemented by 2016, for sales representatives who deal directly with those who prescribe medicines and will reconsider payments to doctors to attend medical conferences.
“It is imperative that we continue to actively challenge our business model at every level to ensure we are responding to the needs of patients and meeting the wider expectations of society,” CEO Andrew Witty said in the statement.