GSK investigating alleged corruption in Iraqi division (RTE News/Telegraph UK April 7th 2014)


http://www.rte.ie/news/business/2014/0407/607262-gsk-iraq-probe/

GSK investigating alleged corruption in Iraqi division

Monday 07 April 2014 12.53

Staff at the pharmaceutical company's Chinese division are already accused of bribery offences
Staff at the pharmaceutical company’s Chinese division are already accused of bribery offences

British drugmaker GlaxoSmithKline is investigating alleged corruption by staff at its pharmaceuticals division in Iraq, the group has announced.

GSK, which already faces a bribery probe in China, stressed that it would not tolerate illegal behaviour by staff.

“We are investigating allegations of improper conduct in our Iraq business. We have zero tolerance for unethical or illegal behaviour,” a spokesman told AFP.

London-listed GSK employs fewer than 60 people in its pharmaceuticals operation in Iraq, while the allegations relate to a “small number” of individuals, he added.

“However, we are investigating whether there has been any improper conduct and these investigations are ongoing.”

The Wall Street Journal had reported that a person familiar with GSK’s Middle Eastern operations had emailed the drugs firm to report alleged misconduct and corrupt practices in Iraq dating from 2012 and 2013.

The spokesman added that GSK remained committed to improve healthcare in emerging nations like Iraq.

“Operating in emerging markets is challenging given the issues many of these countries face with funding and maturity of their respective healthcare systems,” he said.

“However, we continue to believe that with robust compliance systems and, by working closely with local governments, our presence in these markets can help improve access to medicines and broader healthcare.”

GSK is currently in the process of overhauling how it markets and sells products around the world, he added.

“We … continue to make fundamental reforms to our sales and marketing practices.

“Following successful roll out in the USA, we are globally changing how our sales representatives are paid and we are also stopping the practice of paying doctors to speak on our behalf.

“We believe these changes will eliminate any perception of conflict of interest and ensure incentives for our employees are aligned with the best interests of patients.”

On Friday, GSK revealed that it had dismissed a small number of workers at its Chinese division as part of the routine monitoring of travel expenses.

However, the move was not linked to Beijing’s ongoing bribery probe, the spokesman said.

In July 2013, GSK admitted that senior employees at its China business appeared to have breached Chinese law, after authorities alleged that employees had bribed government officials, pharmaceutical industry groups, hospitals and doctors to promote sales.

http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/10749796/GSK-investigates-bribery-claims-in-Iraq.html

GSK investigates bribery claims in Iraq

British drugmaker, already embroiled in corruption scandal in China, looking into allegations against its Iraqi unit

A GlaxoSmithKline logo

GSK employs fewer than 60 people in its pharmaceuticals operation in Iraq and company spokesman says allegations relate to a small number of individuals in the country Photo: Getty Images

GlaxoSmithKline is investigating allegations of corruption against the company’s Iraqi arm, just nine months after becoming embroiled in a major bribery scandal in China.

The British drug giant is looking into claims the company hired government-employed doctors and pharmacists in Iraq as paid sales representatives, to boost sales of its products.

GSK launched the inquiry as soon as it was made aware of the allegations a number of weeks ago, the Telegraph understands.

“We are investigating allegations of improper conduct in our Iraq business. We have zero tolerance for unethical or illegal behaviour,” said a company spokesman.

He also said GSK employed fewer than 60 people in its pharmaceuticals operation in Iraq and that allegations relate to a small number of people in the country.

Glaxo received the allegations from a whistleblower who was familiar with GSK’s Middle East operation, according to the Wall Street Journal, citing emails from this person.

The whistleblower accused Glaxo of hiring 16 government-employed doctors and pharmacists as sales representatives for the company.

The person also claimed the practices make GSK vulnerable to prosecution under the UK Bribery Act and the US Foreign Corrupt Practices Act.

GSK is also facing allegations that sales staff in China paid as much as £320m in bribes to win market share.

The company has admitted that its own investigation into the allegations, made last year, unearthed evidence of wrongdoing by a handful of sales staff, but maintains they worked outside GSK’s control systems. It has called the allegations “shameful” and said it is cooperating with the ongoing Chinese investigation. The scandal has hit sales of GSK products in China, where it makes around 3pc of global revenues.

Despite GSK’s compliance problems in emerging economies, it continues to see these markets as crucial for the business. Last week it unveiled a $200m (£120m) investment in sub-Saharan Africa.

“We continue to believe that with robust compliance systems and, by working closely with local governments, our presence in these markets can help improve access to medicines and broader healthcare,” said a company spokesman.

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