Chinese Authorities Release More Sordid Glaxo Scandal Details

Chinese Authorities Release More Sordid Glaxo Scandal Details

July 29th, 2013 // 1:08 pm @

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There have been more developments in the bribery/sex scandal in China involving GlaxoSmithKline. GSK has now put Herve Gisserot, the senior vice president of its business in Europe, as the head of operations in China. His predecessor, Mark Reilly, is going to return to China in the next few months to cooperate with Chinese authorities. He left the country in June just before GSK workers were detained for interrogation.

Chinese police have released more details about the scandal, in which workers are being accused of paying over $400 million to doctors in bribes, and also to government officials. They also allegedly used a travel agency to funnel some money to increase prescriptions of some Glaxo medicines. The CEO of the company stated that this mess is ‘shameful’ and he cast blame on certain people in the company that acted outside of controls and processes of Glaxo.

News broke in China this week that there is a regional sales manager in Henan Province named Li who managed the sale of respiratory drugs to 10 hospitals in the city of Zhengzhou. He explained that every sales person was given about $1800 and a list of physicians, who were then invited to attend conferences.

They were informed that they needed to establish a good rapport with the doctors. One rep named Wang, who worked under Li, stated that she would go into the office of the doctor and act as their assistant, and doing anything they asked, up to and including sex. She said that Glaxo officials in China knew and gave orders to provide bribes to doctors with conference trips or with money.

The police in China state that up to 10% of sales were sent to the personal accounts of doctors. Once a doctor had agreed to play ball, Glaxo paid them a bonus that was based upon how many prescriptions he or she wrote. Those who did not want to do this were given the opportunity to go to conferences and get gifts.

Papers in China also reported on a man named Yu Fu, who was the director of a respiratory department. He said he was given gifts and free dinners. When the department had events, GSK would pay for the entire thing. He also received a few dollars for every Rx her wrote for certain Glaxo asthma drugs and inhalers. He is claiming that GSK set a goal to increase drug sales at his hospital by 30% for each of the last two years.

GSK has flown several top execs to China, as well as a team of lawyers and several Ernst & Young auditors, to sort out this scandal. The bribery scandal first was revealed a few weeks ago when an anonymous tip sent emails to GSK execs outside the country, and later to the press.

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