“…In a statement, the company said it had cooperated with the SEC and it had received credit for taking steps to improve its operations, such as changing how sales representatives are paid and stopping the practice of paying healthcare professionals to speak to doctors about the company’s products.
It also said the U.S. Justice Department, which had opened a parallel criminal investigation into the matter, was closing its probe without any action against the company.”….
GlaxoSmithKline PLC agreed to pay $20 million to settle charges that the drugmaker’s Chinese subsidiaries engaged in bribery schemes to increase sales in the Asian country, the Securities and Exchange Commission said Friday.
The SEC alleged that between 2010 and 2013, GlaxoSmithKline’s subsidiary and a China-based joint-venture violated the Foreign Corrupt Practices Act by providing inappropriate gifts to foreign officials, including health-care professionals. The commission also alleged that the payments were often falsely recorded as legitimate expenses.
The bribes took the forms of gifts, improper travel and entertainment with no or little educational purpose, shopping trips and cash, among others, the SEC said in its order.
Glaxo entered into the SEC agreement without confirming or denying the charges, the U.S. agency said in its statement.
In a separate statement, Glaxo said it has installed several reforms, including shifts to the compensation of sales representatives and the end of payments to health-care practitioners for advocating for Glaxo products to other prescribers.
“The U.S. Department of Justice has also concluded its investigation into these matters and will be taking no further action,” Glaxo said in a prepared statement. “The SEC and DOJ investigations were initiated as part of an industry-wide inquiry in 2010.”
A Justice Department spokesman declined to comment.
In 2014, a Chinese court found the company guilty of bribery and penalized Glaxo $491.5 million in the same matter, which was touted at the time by Chinese state media as the largest-ever corporate fine in China.
Five of the company’s managers, including Mark Reilly, its former top China executive, were also convicted of bribery-related charges and received suspended prison sentences.
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