The London-based multinational drugmaker, also known as GSK, supplies key products such as vaccines in China, as well as drugs for lung disease and cancer. In 2013, the company was targeted by Chinese authorities over alleged corruption, price-fixing and quality controls.
GlaxoSmithKline China executives face bribery probe
Ministry says executives at China subsidiary of GlaxoSmithKline paid hospitals, doctors, groups
Toh Han Shih and Alice Yan
Senior executives of a Chinese subsidiary of British drug giant GlaxoSmithKline (GSK) have confessed to "serious economic crimes", the Ministry of Public Security said.
In the past few days, the ministry has investigated top managers of GSK's mainland unit, GlaxoSmithKline (China) Investment, in Shanghai, Henan's capital Zhengzhou, Hunan's capital Changsha and other Chinese cities, it said on its website.
"There are investigations in Beijing, Shanghai, Zhengzhou and Changsha," a spokeswoman for the company confirmed.
The ministry said it had detained employees of GSK China Investment as well as suspects at some travel agencies.
"After interrogation, the suspects fully confessed their crimes," the ministry said. "The evidence substantially proves some senior executives of GSK China Investment and senior executives of some travel agencies were involved in serious commercial bribery and tax crimes."
The ministry added: "Public Security has found that in recent years, GSK China Investment used various channels like travel agencies to bribe without restraint government officials, drug associations, medical foundations, hospitals and doctors."
The firm engaged in direct bribery as well as indirect bribery through its sponsorship of various activities, the ministry said.
Some foreign pharmaceutical firms sponsor the attendance of mainland Chinese at medical events in other countries, where the companies pay for hotels, restaurants and travel, a salesman in a US pharmaceutical firm's Shanghai office said.
"In China, we have to bribe senior doctors and senior officials," said the drug salesman, who requested anonymity. "Otherwise, you lose out."
In addition, some executives at GSK China Investment had used false value-added tax receipts, fake receipts from travel agencies for trips and fake general receipts, the ministry said.
"The number of people implicated in this case is many, the duration of the crimes is extensive, the money involved is huge, and the nature of the crimes severe," it said.
Some marketing heads in drug companies have falsified invoices to get cash to bribe senior officials at hospitals, medical foundations and industry associations, the drug salesman said.
An employee at a medical equipment company in Shanghai, who also requested anonymity, added: "It's widely believed the investigation was sparked by a tip-off from within GSK. This whistle-blower is probably a high-level manager who knows the company well, has access to confidential material and has recorded all these documents."
The GSK spokeswoman said a person thought to be the same whistle-blower had made allegations of various malpractices in the company's operations in China.
GSK's internal investigations had found no evidence of bribery or corruption involving doctors or government officials, the spokeswoman said.
"If evidence of such activity is provided, we will act swiftly on it," she said.