As GlaxoSmithKline continues to face bribery accusations from Chinese authorities over its dealings in the country, we answer five questions on the latest development.
What has GSK been accused of?
The Chinese athorities accused and detained senior executives of GSK over a week ago alleging the company funnelled 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate bribes and increase sales. They say this ultimately pushed up the prices of drugs in China.
GSK said it is fully co-operating with the investigation. They had initially said the company cold find no evidence of corruption internally.
What’s the latest news?
Today the global British drug maker has back tracked and admitted that some of its executives in China had appeared to have broken the law in relation to the bribery scandal.
The company added that it had zero intolerance for any employees who broke the law.
What exactly did the company say?
GSK’s head of emerging markets, Abbas Hussain, in a statement said:
“Certain senior executives of GSK China who know our systems well, appear to have acted outside of our processes and controls which breaches Chinese law. We have zero tolerance for any behaviour of this nature.
“I want to make it very clear that we share the desire of the Chinese authorities to root out corruption wherever it exists. We will continue to work together with the MPS and we will take all necessary actions required as this investigation progresses.”
He added: “In addition, savings made as a result of proposed changes to our operational model will be passed on in the form of price reductions, ensuring our medicines are more affordable to Chinese patients.”
Has any British nationals been involved in the scandal?
Only one – Peter Humphrey, who runs Hong Kong- based ChinaWhys. News of his detention was reported today.
Although not a GSK employee he is believed to have been a contractor for GSK and is now one of up to 10 individuals detained over the allegations. The others are Chinese.
The reason for his detention is unclear but the foreign office has said they are aware of it and are providing consular assistance to his family.
Have any other drug companies been targeted?
Yes. It has emerged today that AstraZeneca has also been visited by Chinese authorities. They visited on Monday and took a sales representative away for questioning.
An AstraZeneca spokesperson speaking to Reuters news agency said: “We believe that this investigation relates to an individual case and while we have not yet received an update from the Public Security Bureau, we have no reason to believe it’s related to any other investigations,” the spokeswoman said.