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article imageGSK bribing medics with cash and 'sexual favors' (update)

By Tim Sandle     Jul 19, 2013 in Crime
'Big Pharma' company GSK is accused of bribing to government officials, doctors, hospitals and industry associations using travel agencies as conduits for the cash in China. China also states that sexual favors were offered as bribes.
The Chinese government has launced an inquiry into accusations by Chinese based executives of the drugs giant GlaxoSmithkline (GSK). The executives are accused of trying to influence doctors to prescribe certain medicines through various 'incentives'. The incentives include money and securing the services of prostitutes. Planet Ivy notes that key GSK executives are accused of being 'ringleaders' in relation to directing funds to the bank accounts, and prostitutes to the bedrooms, of Chinese officials and doctors in return for a boost in sales of their medicinal drugs, as well as for allegedly keeping the price of medicines artificially high.
The charges come from the Chinese Public Security Ministry, led by Gao Feng, head of the Economic Crime Division. As part of the investigation, four executives have been detained, according to Pharma Manufacturing. The official charge relates to 3 billion yuan (U.S. $489 million) of spurious travel and meeting expenses, and trade in sexual favors, which the executives are said to have approved and authorized though a complex chain involving over 700 'middlemen'.
Gao is quoted by the Guardian as saying: "We found that bribery is a core part of the activities of the company [GSK]. To boost their share prices and sales, the company performed illegal actions."
According to the Financial Post, GSK has sent its head of emerging markets - Abbas Hussain - to China to oversee the drugmaker’s response to a government probe of suspected economic crimes. GSK's line was originally that it could find no evidence to support the charges, as the New York Times reports.
However, GlaxoSmithKline said on July 22 that some executives may have broken the law, while rival drug maker AstraZeneca said police are investigating one of its sales representatives in relation to similar allegations.
Nonetheless, Chinese authorities are continuing to push ahead with their investigations and the four executive suspected of master minding the deal remain in custody. The news site RT recounts that the British company GSK pleaded guilty and paid $3 billion to settle a US criminal and civil allegation in 2012 for illegal promotion of prescription drugs and failure to report safety data.
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