UK executive accused in GlaxoSmithKline China probe

The BBC’s Celia Hatton was granted rare access to a news conference at Chinese police HQ

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Chinese police have accused a British GlaxoSmithKline (GSK) executive of ordering staff to bribe hospital officials to use its medical products.

Mark Reilly and two other colleagues are also suspected of bribing government officials in Beijing and Shanghai, they said.

Police have handed the case over to prosecutors, officials said.

GSK said it took the allegations "very seriously" and would co-operate with the authorities over the matter.

Chinese authorities announced in July last year that they were investigating GSK, detaining four Chinese GSK executives.

Polish allegations

The police ministry accused Mr Reilly, the company's former head of China operations, of personally running a "massive bribery network".

Analysis

Today's announcement will be a bitter pill for British Prime Minister David Cameron to swallow, having used his trip to China last year to lobby on Glaxo's behalf. "Properly standing up for British businesses and British individuals," he said at the time.

Politics is almost certainly playing its part. The Chinese healthcare industry is rife with corruption - feeding off the desperately low wages of doctors and officials - and no part of it, particularly not the local pharmaceutical supply chain, is exempt.

So Glaxo may well have a case to answer but it may also be a scapegoat. Foreign companies are easy targets in the midst of a crackdown on corruption, and a British one perhaps even more tempting, given China's fury over David Cameron's 2012 meeting with the Dalai Lama.

There is no way of knowing how much bearing that may have had of course, but if nothing else, today's excoriating indictment is a lesson in the limits of British diplomacy in modern day China.

He is alleged to have pressed his sales team to pay doctors, hospital officials and health institutions to use GSK products, resulting in the "illegal revenue" of hundreds of millions of dollars.

At a news conference, the investigators took pains to explain how the cost of the alleged bribes was passed directly on to Chinese consumers, the BBC's Celia Hatton reports.

They said the cost of the drugs sold by GSK in China was much higher than that of similar drugs sold by the company in other countries - sometimes up to seven times higher.

The investigators also said that while the company itself had been "very responsible and has given us their full support", the firm's operation in China "tried to pay bribes" in order to "obstruct" their efforts "in exposing their bribery behaviours".

Mr Reilly had briefly left China when the investigation was launched last July, but returned to help with the inquiry. A police investigator was believed to still be in China. Mr Reilly could not be reached for comment.

The Chinese operation of GSK was accused by the Chinese authorities, when the probe first began, of using travel agencies and consultancies to transfer bribes over several years.

GSK has already apologised for employees apparently acting outside of its internal controls, but denies the sums of money are anything like as high as those alleged to have been paid.

The pharmaceutical giant is also facing a criminal investigation into similar allegations in Poland.

It follows allegations made by former sales representative Jarek Wisniewski to the BBC's Panorama programme in April that doctors were paid to promote GSK's asthma drug Seretide.

If the allegations in either country are proved, GSK may have violated both the UK Bribery Act and the US Foreign Corrupt Practices Act. It is illegal for companies based in the US or UK to bribe government employees abroad.

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