GSK admits fault and will lower its prices in China
Drug giant says top staff appear to have broken law, as AstraZeneca comes under spotlight
British drug giant GlaxoSmithKline (GSK) will lower the prices of its products on the mainland and has admitted that some of its senior executives appear to have broken the law there.
Meanwhile, the mainland's crackdown on pharmaceutical firms widened to AstraZeneca.
UK ministers are aware of the investigation. We remain in regular contact with GSK and the Chinese authorities
The Shanghai office of the Anglo-Swedish firm was visited by the Shanghai Public Security Bureau "regarding a local police matter focused on a sales representative", a spokesman for the company said. "This investigation relates to an individual case."
Shanghai is the China headquarters of AstraZeneca, which is listed in Stockholm, London and New York. Last year, the firm's revenue was US$27.97 billion.
Abbas Hussain, GSK's president for Europe, Japan, emerging markets and the Asia-Pacific, admitted during a visit to the mainland that "certain senior executives of GSK China … appear to have acted outside of our processes and controls, which breaches Chinese law".
Last year, GSK sacked 56 employees in China for violating its rules, out of a worldwide total of 312 dismissals, a source said.
Hussain said GSK, listed in London and New York, would change its business model in China, which would create price cuts for mainland customers.