GSK In China II (Thomas Fox) : The Denoument

Following on from his brilliant essay on GSK’s China-Bribe Scandal (see here), Thomas Fox has written a part II on the debacle. This 2nd e-book is some 17,000 words long (too long for a blog post) and if you want to read it in full you can access it on this link, however here are some choice quotes-

GSK 2,-41,61

 “Author’s Note

Last summer brought the anti-corruption compliance world a new situation as the Chinese government aggressively investigated, for the first time a western company for bribery and corruption of Chinese citizens in China. Last year I published an eBook on the investigation phase of GlaxoSmithKline PLC (GSK) corruption matter in China. This year, as the Chinese government moved into the prosecution phase, I have updated the GSK matter through its conviction for bribery and corruption by a Chinese court. I have also tied to collect some of the most significant lessons to be learned for any compliance practitioner from the facts and events surrounding this case and what it may mean going forward for the compliance practitioner. Once again, thanks to Maurice Gilbert at Consileum for the idea to update my book, and my heart of gold wife, Michele, for editing it..”

  • “..Where were the US Department of Justice (DOJ) or Securities and Exchange Commission (SEC) be on these issues as the might relate to violations of the US Foreign Corrupt Practices Act (FCPA)? Consider the following about GSK; in July of 2012 GSK pled guilty and paid $3 billion to resolve fraud allegations and failure to report safety data in what the DOJ called the “largest health care fraud settlement in U.S. history” according to its press release. The DOJ press release went on to state “GSK agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices.” The press release noted that the resolution was the largest health care fraud settlement in US history and the largest payment ever by a drug company for legal violations…”
  • “..You would think that any company that has paid $3 billion in fines and penalties for fraudulent actions would take all steps possible not to engage in bribery and corruption. Indeed as part of the settlement GSK agreed to a Corporate Integrity Agreement (CIA)…”
  • “…This CIA not only applied to the specific pharmaceutical regulations that GSK violated but all of the GSK compliance obligations, including the FCPA in addition to requiring a full and complete compliance program, the CIA specified that the company would have a Compliance Committee, inclusive of the Compliance Officer and other members of senior management necessary to meet the requirements of this CIA, whose job was to oversee full implementation of the CIA and all compliance functions at the company…”
  • “..These additional functions required Deputy Compliance Officers for each commercial business unit, Integrity Champions within each business unit and management accountability and certifications from each business unit.Training of GSK employees was specified…”
  • “…Further, there was detail down to specifically state that all compliance obligations applied to “contractors, subcontractors, agents and other persons (including, but not limited to, third party vendors)”. So while GSK may have separate FCPA liability to be investigated by the DOJ; it may be more of an issue that the company could be in violation of its CIA. GSK has of course averred that it is fully cooperating with all of the various investigations into its alleged bribery and corruption. Further, as reported in Ward’s FT article, “GSK said it was “committed to operating its business to the highest ethical standards”. The company had “previously denied any systemic problem with corruption and said the latest Chinese allegations were “deeply concerning to us and contrary to the values of GSK”..”



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