China’s Public Security Bureau released a statement claiming Glaxo is involved in a scheme to raise drug prices by bribing doctors and government officials in several Chinese provinces. As many as 30 Glaxo employees have been detained so far, including four company executives.
Investigations into Glaxo started last year when a whistleblower released detailed sales information to the State Administration for Industry and Commerce. Glaxo said an internal investigation turned up no evidence of wrongdoing. Glaxo claims to be cooperating with the Chinese investigations.
The Wall Street Journal reports that the Chinese ministry found evidence of Glaxo sales personnel rewarding medical and hospital employees as well as government officials with cash and medication prescription benefits. There are also suspicions that high-level personnel have also accepted bribes through conference rebates and project fees.
Gao Feng, head of the economic crime investigation unit of China’s Ministry of Public Security, said in a statement that Glaxo transferred $489 million through travel agencies since 2007.
United States investigators are also looking into allegations that Glaxo paid bribes to foreign government officials. The company is facing multi-billion dollar settlements with US regulators for illegal marketing of its products.
