Comment on China fines GlaxoSmithKline $492M for bribery

China fines GlaxoSmithKline $492M for bribery

The court sentenced the company's former China manager, Briton Mark Reilly, and four Chinese co-defendants to prison but postponed the sentences for two to four years, suggesting they may never be served. The case, first publicized in mid-2013, highlighted the widespread use of payments to doctors and hospitals by sellers of drugs and medical equipment in a poorly funded health system that Chinese leaders have promised to improve. Low salaries and skimpy budgets drive doctors, nurses and administrators to make ends meet by accepting money from patients, drug suppliers and others. GSK had announced in June 2013 that it conducted a four-month investigation of allegations its sales staff in China were bribing doctors and found no wrongdoing. Almost immediately, the case took a bizarre turn when two private investigators who worked for Glaxo, a Briton and an American, were detained on charges of illegally trafficking in personal details about Chinese citizens. The police investigation found that GSK employees funneled as much as 3 billion yuan ($490 million) through travel agencies and consulting firms, which kicked back some of that money for use as bribes.

 

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