Serious Fraud Office investigates GSK
This article was originally published in SRA
The UK's Serious Fraud Office has opened a formal criminal investigation into GlaxoSmithKline's commercial practices1.
The news comes less than two weeks after Chinese police named a British GSK executive as the suspected ringleader of alleged bribery claims against GSK in that country, following a 10-month investigation2. Mark Reilly is the former head of GSK's prescription drug business in China. Mr Reilly and two other GSK executives, named in reports as Zhang Guowei and Zhao Hongyan, are also suspected of bribing government officials in Beijing and Shanghai.
While there is no confirmation of the link between the situation in China and the SFO's decision, there had been suggestions that if proved, the allegations against GSK in other countries contravened the UK Bribery Act and the US Foreign Corrupt Practices Act, which both ban payments to employees of any government to secure business abroad.
Chinese authorities began investigating GSK in July last year3. The scandal has devastated the company's £1 billion business in the country where it declined more than 60% in the aftermath. The entire pharmaceutical sector in the country has since been under scrutiny by Chinese officials4.
GSK was recently forced to deny there was any "systemic issue with unethical behavior" at the company after a series of follow up bribery allegations in other countries in recent months. Poland, Iraq, Jordan and Lebanon are all on the list of countries where GSK is being investigated.
GSK said last December that it was making major changes to its global sales and marketing practices by scrapping individual sales targets for its drug reps.
It is also "modernizing" its relationship with doctors by ceasing payments for speaking arrangements or attendance at medical conferences, although this latter move will take until 2016 to become effective.
In a 27 May statement on the SFO investigation, GSK said it was "committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO".
References
- SFO press release, 27 May 2014, www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2014/glaxosmithkline-plc-investigation.aspx
- British man 'masterminded' GSK misconduct in China, officials claim, Scrip Regulatory Affairs, 16 May 2014
- Scrip Regulatory Affairs passim
- Chinese bribery crackdown far from over for pharma, Scrip Regulatory Affairs, 21 February 2014