To fund the alleged bribery, Chinese authorities said Glaxo increased drug prices and declared higher import prices at customs until—in some instances—they were as much as seven times the price that the same drugs fetch in the U.S. and other markets.
Mr. Reilly “successfully set up and expanded several sales departments that set artificially high prices, and he organized various departments to bribe doctors, hospitals, medical care organizations and other departments on a large scale in order to sell drugs,” said Gao Feng, an official at the Ministry of Public Security spearheading the probe of the U.K. pharmaceutical company.
Mr. Gao said that Glaxo also had formed an internal team to disrupt law enforcement investigations of Glaxo bribery.
In all, the investigation involves a total of 46 suspects, according to the official Xinhua news agency. “Glaxo’s acts of bribery have penetrated all aspects of the company’s business operation,” Mr. Gao said.
GSK comment: China investigation
Following media coverage today related to the investigation being conducted by the Chinese authorities into GSK China Ltd, a GSK spokesperson said:
“We have today met with the MPS who updated us on their investigation into GSK China Ltd.”
(which translates as: we hope we can persuade them to go easy on us)
“We take the allegations that have been raised very seriously. They are deeply concerning to us and contrary to the values of GSK.”
(which translates as: damn we got caught!)
“We understand the MPS has issued the case to the Changsha People’s Procurator in Hunan Province. The Procurator is now reviewing the case.”
“We will continue to fully co-operate with the authorities in this matter.”
(Which translates as: We will use all our influence, from MPs, Regulators and even the UK prime Minister to get off as lightly as we can)
“We want to reach a resolution that will enable the company to continue to make an important contribution to the health and welfare of China and its citizens.”
(Translation: China is a very lucrative market… damn we got caught!)