Police get drug giant's help in bribery scandal

Updated: 2013-07-23 02:07

By ZHANG YAN and WANG HONGYI (China Daily)

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GlaxoSmithKline says it will also assist with drug price investigations

British pharmaceutical giant GlaxoSmithKline promised to cooperate with Chinese police in the investigation of an alleged bribery and drug pricing scandal after a representative of the head office met with a senior official from the Ministry of Public Security, the ministry said on Monday.

On Sunday, a senior official from the ministry met with Abbas Hussain, president of Europe, emerging markets and Asia Pacific of Glaxo-SmithKline in Beijing, urging the company to cooperate with Chinese police in the investigations.

"We hope the Chinese branch of GlaxoSmithKline can resume production and operation as soon as possible," the ministry said on Monday.

According to the ministry, some senior executives from GlaxoSmithKline's Chinese company colluded with other enterprises to push up drug prices, expand sales and gain an unfair advantage.

Abbas Hussain apologized on behalf of the GlaxoSmithKline head office and said it fully supports the Chinese government's action to fight corruption and will fully support and cooperate with Chinese police in the investigation.

Hussain said the company will improve its business model to better serve Chinese customers.

The company will "take all necessary actions required by the outcome of this investigation", it said.

In addition, it said, it will fully support China's healthcare reform.

Earlier this month, Chinese police accused GlaxoSmithKline China of funneling money to Chinese officials and doctors to boost the sales of its products. So far, four senior Chinese executives at the company have been detained.

The British pharmaceutical giant has also been accused of transferring up to 3 billion yuan ($489 million) to 700 middlemen over six years to facilitate the corruption.

Li Lin, a lawyer with the Beijing Law Society who specializes in criminal cases, said it's satisfactory that the head office has made a quick response to the bribery scandal.

"It is not a single case of commercial bribery in China. Sectors like healthcare and education are the worst-hit areas for bribery crimes in China due to the huge economic profits," she said.

She suggested industry and taxation departments enhance supervision on enterprises, especially transnational companies, to prevent similar scandals.

China has widened its investigations into alleged malpractices of foreign pharmaceutical companies following the bribery scandal.

Belgian drugmaker UCB said last week that officials from the State Administration for Industry and Commerce visited its office in China.

"They've been launching inspections with several Chinese and foreign pharmacy companies in China. As part of the process our Shanghai office was visited by the authority," a spokesman for UCB was quoted by Reuters as saying.

The spokesman didn't identify the companies involved.