China Accuses GlaxoSmithKline of Corruption

At The New York Times, David Barboza reports the latest development in a series of government probes and proddings of foreign companies in China: confessions, according to the Ministry of Public Security, of corrupt practices from GlaxoSmithKline executives.

The Ministry of Public Security said people working for the drug maker had bribed doctors, hospitals and government officials and funneled illicit payoffs through travel agencies, pharmaceutical industry associations and project funding.

The government did not name any executives or give detailed figures. But it said the case involved “huge amounts of money.”

[…] Earlier this year, The Wall Street Journal reported that a whistle-blower had shared some information with the newspaper and claimed that executives at the company had bribed doctors and hospitals. It is unclear whether the investigation by the Ministry of Public Security is linked to the whistle-blower. [Source]

An analyst quoted by Reuters suggested that GSK “would be ultra cautious on anything to do with corrupt practices” after paying a $3 billion fine in the U.S. last year. At The Financial Times, Andrew Jack reported that such practices are not uncommon in China, but that the allegations “could also reflect the actions of a disgruntled employee, manipulations by local commercial rivals, political manoeuvres, pressures to reduce prices, or even an attempt at a shakedown.”

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