GlaxoSmithKline Corruption Of Doctors: “No Smoke Without Fire”


Comment: GSK probe | Cupid stake sale


Martin Flanagan


BIG Pharma and improper sales and marketing behaviour related to pushing its drugs is not exactly rare. Along with the defence sector and the banks, the drugs sector is one of the industries that seems to attract allegations of dodgy behaviour too often to make it comfortable, whether eventually proven or not.

Mud sticks in the public mind. The latest major pharmaceuticals group in the firing line is GlaxoSmithKline, which is facing a criminal investigation in Poland for allegedly bribing doctors to push its asthma drug, Seretide.

GSK’s embarrassment is compounded by previous allegations of corrupt behaviour in China and Iraq. The Polish allegations were the subject of a BBC Panorama documentary Who’s Paying Your Doctor?, which aired last night.

If the new allegations are proven, GSK risks having contravened both the UK’s Bribery Act and the US Foreign Corrupt Practices Act.

For its part, the company has said its own internal investigation into the matter found that one employee had behaved inappropriately in promoting Seretide, had been reprimanded and disciplined, and that it was co-operating fully with Poland’s anti-corruption bureau.

Panorama said that 11 doctors and a GSK regional manager have been charged with alleged corruption between 2010 and 2012.

Without pre-judging any possible outcomes, it is hardly strange when such allegations surface given that Big Pharma and its international reps deal daily with thousands of doctors.

Rather damningly, a Reuters examination in 2012 of regulatory filings by the world’s biggest ten drugs companies found that eight had warned of potential costs related to charges of bribery in overseas markets.

Like the food chain in the supermarket sector, there is only so much that head office can do to ensure that all the vast tentacles of a global business operation is operating completely legally and ethically. Even so, it is little wonder that in GSK’s case its share price wobbled somewhat yesterday.

Against the big canvas of its operations, the Polish events are pretty insignificant. But the last thing that a major pharma player wants is a reputation for “previous” in this vexed area. Chinese authorities have accused GSK and its reps of giving a massive 3 billion yuan (£289 million) to doctors and officials to encourage them to use its medicines.

Last week, the company also admitted it was investigating allegations of bribery in Iraq. Above all, GSK, along with its peers, does not want an insidious creep of “no smoke without fire” developing in investor and public sentiment towards it.

In terms of overseas selling practices by GSK, one investigation is embarrassing, three invites serious concerns.


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