Chinese officials investigating claims of bribery and corruption at GlaxoSmithKline's Chinese HQ have accused former head of China operations, Mark Reilly, of "personally running a "massive bribery network"."
Reilly, it is claimed, pressed his sales team to pay doctors, hospital officials and health institutions to use GSK products, resulting in the "illegal revenue" of hundreds of millions of dollars. He is also suspected of bribing government officials in Beijing and Shanghai.
Reilly left China before Chinese authorities started their investigation but returned to assist Chinese authorities with their inquiries.
Four other GSK employees, namely; legal affairs director Zhao Hongyan, vice president and operations manager Liang Hong, human resources director Zhang Guowei, and business development manager Huang Hong were arrested in 2013. Hong had already gone on Chinese television and admitted to the crimes and explained how the scheme worked, including the use of fake conferences and travel agencies to create receipts for services that were never performed. The surplus funds were allegedly then used to pay bribes.
In August 2013 China’s official news wire, Xinhua, quoted a 35-year-old female medical representative who reportedly worked for a GSK regional sales manager named only as Mr Li.
The woman, named as Ms Wang, said “some executives gave clear directives to the sales department to offer bribes to doctors with money or opportunities to attend academic conferences.”
Ms Wang said she would even go so far as fulfilling some doctors’ “sexual desires” in order to “meet their needs” and persuade them to prescribe more drugs."
GSK's CEO Andrew Witty, who last year played down the $3billion fine slapped on his company for kickbacks and promotion of drugs off-label, must be totally embarrassed by the current state of affairs at Glaxo.
Witty, now claims that the allegations appear to be true and feels.“personally deeply disappointing,”
Witty, of course, wouldn't be Witty if he didn't play down the allegations.
He claims that there are control mechanisms in place to prevent bribery and other forms of corruption, but that the methods these individuals used “would have been difficult to find using our controls.”
In other words GSK's control mechanisms simply don't work, a bit like the drugs they manufacture, huh?
Back in December Witty joined British PM David Cameron on a trip to China (probably an attempt to douse the flames on the Chinese allegations.) [Back Story]
Bob Fiddaman
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