Brilliant New Post From Bob Fiddaman: “GSK China Bought Patient’s Silence for $9,000″…


As usual, Mr. Fiddaman hits the nail on the head…


 

http://fiddaman.blogspot.ie/2016/11/gsk-china-bought-patients-silence-for.html

Wednesday, November 09, 2016

GSK China Bought Patient’s Silence for $9,000

A truly fascinating read regarding the corruption in China, all committed by the hand of British based pharmaceutical giant, GlaxoSmithKline.

The New York Times (NYT) recently ran a superb article regarding GSK’s nefarious activities in China, activities that saw them plead guilty, a result of which saw them being handed down a $500 million dollar fine.

The article by David Barboza, although brilliant, is tantalizing, in as much that The Times claims to have in its possession emails and documents, none of which they have provided, at least in their entirety.

The China scandal is a story of greed, corruption, cover-ups, bribery and pay-offs, all combined with a sex scandal video and a company burying it’s head in the sand over its China practices – preferring instead to go after the person who blew the whistle on the whole sordid affair.

It’s a subject I covered many times on this blog (Links at the foot of this post) and one that seems to be rehashed with additions on a regular basis.

The Times article throws out some very interesting facts about the case that were previously kept under wraps – one such fact being that they (The Times) have evidence that “Glaxo “almost killed one patient by illegally marketing its drug Lamictal,” said the email, which was obtained by The Times. “GSK China bought the patient’s silence for $9,000.””

Glaxo buying a patient’s silence? Surely not?

There was me thinking they only did that in litigation, Paxil withdrawal (Over 3,000 patients ‘paid off’) – Paxil Birth defects (Over 800 patients ‘paid off’)

So, who was the patient in receipt of Glaxo’s $9,000, moreover, what did this patient have that GSK didn’t want others to see?

According to the NYT…

The email was one of nearly two dozen that the whistle-blower sent over the course of 17 months to Chinese regulators, Glaxo executives and the company’s auditor, PricewaterhouseCoopers.

In 2012 Glaxo plead guilty to a whole host of violations throughout America, the guilty plea resulted in a record breaking fine of $3 billion. At the time, Glaxo Chief, Andrew Witty, pledged, “We’re determined this is never going to happen again.”

Witty, who had been made aware of the unfolding stench in China shortly after the 2012 guilty plea in the US, is stepping down from his CEO position in April next year – It’s quite a legacy he has left behind, one which he took over from former Chief, JP Garnier who, in essence, oversaw the corruption in America and left Witty to suck up the fallout.

What an abhorrent company this is. Corruption, bribery (of officials and patients) and the manufacturer of prescription meds that have either killed people or disfigured them in such a way that they need to continue having surgery for the rest of their lives. Let’s not forget those that have suffered as a result of becoming addicted to GSK’s medications either.

The Times article also digs deeper into the involvement of Mark Reilly, who, at the time, was Head of GSK’s China operations. They claim…

An email alleged that Mr. Reilly, a British national who had helped manage the company’s China operation for four years, was complicit in a bribery scheme tied to a travel agency called China Comfort Travel, or C.C.T. According to the email, Glaxo funneled money through the travel agency to pay off doctors. The travel agency also supplied Mr. Reilly with women, as a way to secure that business.

“In order to acquire more business, C.C.T. bribed Mark Reilly, the general manager of GSK (China) with sex,” the email said. “Mark Reilly accepted this bribery and made C.C.T. get the maximized benefits in return.”

That’s some perk to have!  China Comfort Travel bring a whole new meaning to the word ‘comfort’.

Any jobs going whereby the employer offers a bonus of playing hide the salami?

I’m sure red-blooded males would have been first in-line for such a job working for a company complicit in fraudulent activities. Sadly, for those red-blooded males at least, Reilly was offered (and took) the perk – I wonder if he claimed for the 15 minutes of overtime too? (Assuming that Reilly could last that long in the sack)

When faced with over 17 months of emails from the whistleblower Glaxo decided to seek help, they did so by hiring a private investigator, Peter Humphrey and his wife, Yu Yingzeng.

Humphrey did some digging and, at the time, provided information to Glaxo that pointed to the possible whistleblower. Vivian Shi, was a 47-year-old executive handling government affairs in Glaxo’s Shanghai office, I say former because she was previously fired by GSK for their belief (Before Humphrey was hired) that she was behind the whistleblowing allegations. The ‘official’ line of her dismissal was that she had been falsifying travel expenses.

Humphrey, it appears, was merely suggesting that Shi may have been involved – he, at no time, ever provided GSK with any evidence that their former executive was the one who was whistleblowing. Shi, who remember had already left GSK, denied any part in the whole Chinagate scandal.

During his investigations Humphrey obtained information that was deemed to be by false means according to Chinese officials. Both he and his wife were later arrested, charged then sent to prison. Meantime, Reilly, who was the mastermind of the whole scam, was sent back home to the UK – No jail time. It’s unknown what Reilly is doing today, presumably he doesn’t work for GSK in any capacity, although I wouldn’t put it past them to re-hire him, just as they did with Vivian Shi, the very person they had fired because they thought she was the one blowing the whistle on its Chinese operations.

Remarkably, GSK re-hired Shi last year, although it is unclear in what capacity. (See Glaxo and Former Whistleblower Suspect Reunite)

GSK must be a truly great company to work for, not only do they offer, by proxy, free blowjobs to heads of operations but they re-hire you after previously sacking you for, ahem, “falsifying travel expenses.”

The Times article is a must read and once again highlights how GSK prefer to target people who bring the company’s misdemeanors to their attention rather than target the person carrying out the misdemeanors.

GSK Corporate motto claims, “We are dedicated to improving the quality of human life by enabling people to do more, feel better, live longer.” – I just never knew this included blowjobs via complicit bribery deals – the re-hiring after breaking rules – and buying patients silence.

Nice job (blow) Glaxo!

Bob Fiddaman

Back Stories

Glaxo – The Sex Tape Scandal

GSK’s Mark Reilly Accused of Running a “massive bribery network”

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

GSK Hiked Product Prices to Fund Bribery Scam

GSK’s Sales Reps Want Their Money Back

GSK’s Private Investigator [The Video]

Peter Humphrey’s 2012 Presentation – Pharma Bribery

GSK’s Chinese Whispers and David Cameron

“GSK were really cagey”, Claims Whitehall Official.

Glaxo Hire Ropes & Gray to Delve Into its Chinese Operations.

GSK CHINA – Bribery was Rife 13 Years Ago

Witty Plays Down China Scandal

Witty Witty Bang Wang. The Glaxo Gangbang…Allegedly

Book Your Holidays With GSK Travel

Andrew Witty… I know narrrrrrrrthing

The Penny Drops for GSK’s Private Investigator.

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Does Mark Reilly Still Work For GlaxoSmithKline?


“…Herve Gisserot replaces Mark Reilly, who left China after four executives were detained in the nation last month. Gisserot was the senior vice-president of Glaxo’s European business.

Reilly will become part of the drugmaker’s senior executive team in London, said Simon Steel, a company spokesman….”

Regular readers of this blog, and followers of GSK news, would be aware of GSK’s Mark Reilly and his appalling role in GSK’s vast bribery network in China. Reilly got off with a suspended sentence, and was deported back to the UK. However, his behavior, was nothing short of sociopathic and criminal.
Considering Mark Reilly’s involvement in the biggest bribery scandal of recent times in China, and considering that he disgraced British business in general I found it quite disturbing to learn that GSK have kept him on as an employee…
His Linked in is still active also, and it seems he has been kept as a consultant or some such similar role perhaps…
GSK..
Pharmafia…

MR1

MR5MR3

 

http://www.independent.co.uk/news/business/news/sex-bribes-and-videotapes-see-glaxosmithklein-ex-boss-mark-reilly-deported-9745465.html

“….GSK was ordered to pay the £297m fine – the largest the Chinese Government has ever handed out. It published an apology to “the Chinese government and the Chinese people” on its website, saying it had “reflected deeply and learned from its mistakes”.

GSK’s China boss, Mark Reilly was given a three-year suspended prison sentence with a four-year probation period. He is to be deported from the country, although the drug maker said he remained in the country as he waited to hear if he had to spend his probation period in China.

Mr Reilly and his Chinese girlfriend featured in a sex tape that was emailed to several senior executives of the drug maker last March. GSK then hired Peter Humphrey, a British investigator based in China, to look into the origin of the video. Mr Humphrey was jailed for two and a half years in August for illegally acquiring the personal information of citizens….’

HG

Blackmail, a sex tape and the fatal error that’s left a top British executive facing 20 years inside a hell-hole Chinese jail

  • Mark Reilly, 52, was a high-flying businessman with GlaxoSmithKline
  • Police raided GSK’s offices and questioned him amid bribery claims
  • In May he was formally accused of presiding over ‘massive bribery network’
  • It’s emerged that investigation was triggered by sex tape featuring Mr Reilly
  • ‘Regardless of facts, Mark Reilly will be found guilty,’ said one legal expert

At first sight, it looks like any other casual family portrait: a middle-aged man, with grey hair and a square jaw poses proudly next to his two grown-up daughters.

The fetching ‘selfie’ was uploaded to image-sharing website Instagram a fortnight ago by the girl standing at its centre, an 18-year-old student from Hertfordshire called Louise Reilly.

‘A bit late, but happy Father’s Day to my wonderful daddy,’ she wrote in the accompanying blurb. ‘I love and miss you every day.’

Daddy's girls: Mark Reilly with daughters Louise (centre) and Jessica. Last summer he was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence

Daddy’s girls: Mark Reilly with daughters Louise (centre) and Jessica. Last summer he was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence

Louise took the picture at a cocktail party in December 2012, shortly after winning a place to study geography at Oxford University.

Her elder sister, Jessica, who is 21, and studies history at Cambridge University, is standing to her left. Yet, as the statement she chose to accompany it hints, an air of sadness now surrounds this seemingly happy photograph.

That’s because the middle-aged father so proudly showing off his high-achieving daughters is one Mark Reilly — a senior executive with British drugs giant GlaxoSmithKline (GSK).

Mr Reilly, 52, was until recently a high-flying businessman with the world at his feet. A glittering 25-year career at GSK had left him dividing time between the Far East — where he ran the £76 billion firm’s Chinese operations — and the exclusive commuter town of Sawbridgeworth in Hertfordshire, where he lived with his wife Jill in a £1.2 million Grade II-listed 17th-century house.

His daughters had been educated at Bishop’s Stortford College, a prestigious £25,000-a-year private school, where they excelled at sport, music, and drama, each achieving ten A* grades at GCSE, four A* grades at A-level and sailing into Oxbridge.

Last summer, however, Mr Reilly was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence.

It became public on June 27, when police in China organised a high-profile raid on GSK’s offices, amid claims that staff were illegally bribing doctors and healthcare officials to prescribe pharmaceutical products.

A few weeks afterwards, they called Mr Reilly in for questioning. He was promptly banned from leaving the country, and has since spent most of his time in various forms of detention.

Sadly, like anyone facing legal problems in autocratic China, Mr Reilly’s human rights have since been blithely disregarded by the authorities.

High-powered: Mark Reilly's wife Jill, who also has a job at GSK. He faces 20 years inside a Chinese jail if found guilty

High-powered: Mark Reilly’s wife Jill, who also has a job at GSK. He faces 20 years inside a Chinese jail if found guilty

For months, he had only limited means to communicate with friends, family, and legal representatives, and was unable to see Louise, Jessica or Jill.

Then, in May, this already perilous situation took a turn for the worse. At a police press conference in Changsha, a 90-minute flight west of Shanghai, Mr Reilly was formally accused of presiding over a ‘massive bribery network’ in which doctors and health officials were illegally paid £320 million over several years.

In scenes reminiscent of a Soviet-era show trial, detectives aggressively dubbed him a criminal ‘Godfather’, who they claimed had greased palms with cash and free holidays, and arranged for associates to be given sexual favours from prostitutes.

They refused to take sceptical questions from assembled reporters, instead reading a pre-prepared statement recommending that this supposed ‘criminal’ be prosecuted on multiple counts of bribery and fraud.

The news conference deepened a scandal which had already knocked billions of pounds off shares in GSK, a leading FTSE-100 blue-chip firm held by many pension funds, and damaged Anglo-Chinese diplomatic relations in the process.

In the cold light of day, it also represented a serious affront to justice, compromising a universal principle of fairness: that Mr Reilly should be presumed innocent until proven guilty.

In China an astonishing 98 per cent of court proceedings end in conviction, and this father-of-two now faces the likelihood of a criminal trial.

‘This is a politically charged case, and China’s politicians control the judiciary.

‘So regardless of the facts, Mark Reilly will be found guilty,’ says Professor Willy Lam, a leading expert on China’s justice system. ‘The question of whether he actually committed a crime will not really be considered. The government will also dictate how long the judges will imprison him for.’

The British Consulate in China says it is following Mr Reilly’s case. Yet despite this, Professor Lam, a scholar at the Chinese University of Hong Kong, says that he will be effectively tried in secret.

‘There will be no jury. Just a judge and his assistants who decide the verdict.

‘There will be no media allowed in court, and no scrutiny of evidence. He may be allowed a few relatives and close colleagues present, and perhaps a UK diplomat. That is all.’

As to his eventual fate, Professor Lam adds: ‘Given the amount of money involved, this is a very serious case, and Mr Reilly could easily be sentenced to life. I expect him to get around 20 years.’

In any normal country, that would be bad enough. But this is China, home to one of the world’s most punitive penal systems.

Indeed, the vast Tilanqiao Prison in Shanghai, where Reilly is likely to end up if convicted, is known locally as the ‘city of death’.

Former inmates at the facility have told how guards carry cattle prods and force errant inmates to submerge their heads in buckets full of excrement and urine.

In the notorious ‘punishment wing’, beatings are rife. Human rights groups have published lengthy critiques of torture methods practised there.

So far, so ugly. But last weekend, this father-of-two’s plight became darker still.

In an extraordinary development, it emerged that China’s police investigation into GSK had been triggered by the circulation of a covertly recorded sex tape, in which Mr Reilly featured.

The video was secretly shot at the British businessman’s Shanghai apartment during 2012 and appeared to show him having extra-marital sex with a young Chinese woman.

It was emailed to a range of senior figures at the drug company last January, as part of what appeared to be a bid to threaten or blackmail them.

In a dramatic twist, I can reveal that the woman it depicted was a secretary who worked at a travel agency accused of helping GSK execute its ‘bribery’ scheme.

Family man: Mark Reilly with daughter Louise. One legal expert said that, regardless of the facts, Mr Reilly will be found guilty because it is a ‘politically charged’ case

Even without that tricky fact, the addition of a sex tape to an already snowballing corporate scandal was hugely embarrassing for GSK (which says it is ‘co-operating fully’ with the Chinese investigation), and deeply upsetting for Mr Reilly and his family.

Yet its existence also, surely, suggests that someone, somewhere, is going to very great — not to mention underhand — lengths to bring him and the company down.

Mr Reilly’s nearest and dearest certainly suspect so. Louise and Jessica are (on the advice of the Foreign Office) maintaining a dignified silence, for fear of further provoking the Chinese authorities.

So too are Mark’s mother, brother and sister. However, close friends tell me they are increasingly convinced that Mr Reilly is the hapless victim of an organised sting. ‘Mark has certainly made mistakes,’ says a source with intimate knowledge of the case.

‘He has made bad decisions in his personal life, particularly this sexual indiscretion, and done the odd thing he regrets in business.

‘But is he some sort of master criminal? Of course he isn’t. Does he deserve to spend 20 years in jail? Absolutely not. It’s a terrible stitch-up.’

The source said Reilly has been ‘in and out of detention’ for the past year, sometimes in formal custody, more often in hotels with police officers stationed outside his room.

He remains an employee of GSK, but is able to have only ‘very limited conversations’ with either the firm, his lawyers, or even his daughters, who in an effort to lighten their mood have taken to calling themselves  ‘Team Reilly’.

Dedicated: Mr Reilly was a company 'lifer' who joined the firm in 1989, shortly after leaving university. He and Jill had previously worked in the U.S. and Singapore before he was offered his role in China

Dedicated: Mr Reilly was a company ‘lifer’ who joined the firm in 1989, shortly after leaving university. He and Jill had previously worked in the U.S. and Singapore before he was offered his role in China

‘The family’s first and only priority is to secure Mark’s safe return,’ the source said.

‘But this is China we are dealing with, so things don’t look good. For a man who had so much, it’s very, very sad.’

Mr Reilly’s ill-fated Chinese adventure began in 2009, when he was offered a promotion to become general manager of GSK’s pharmaceuticals division there.

A company ‘lifer’ who joined the firm in 1989, shortly after leaving university, he and Jill (who also has a high-powered executive job at GSK) had previously worked in the U.S, where Louise was born, and Singapore.

With their then-teenage girls in secondary school, Reilly was reluctant once more to uproot his family, however. So he decided to move alone to Shanghai, where Jill and the children would join him in school holidays. On paper, the move represented a fantastic career opportunity.

Though GSK is one of the world’s largest drug companies, its footprint in China is relatively tiny. Indeed, although the country boasts more than 1.3 billion citizens, and is growing dramatically wealthier, it still represents just 3.5 per cent of the firm’s global sales.

Reilly duly set about dramatically increasing the firm’s revenues, setting ambitious sales targets for his mostly Chinese staff. But his eagerness to pursue those goals sparked friction with local authorities.

‘Like most companies in its field, Glaxo has a highly aggressive sales culture,’ says a Shanghai-based source with knowledge of the company’s operations.

‘Sometimes, that has got it in trouble with regulators.’

‘In China, it doesn’t work like that. Get caught, and you’ll go to prison’ – A Shanghai-based source

A few years ago, for example, the firm was ordered to pay a record $3 billion (£1.7 billion) fine in the U.S. after being caught illegally paying doctors to prescribe dangerous drugs. ‘Mark was steeped in this culture, where you push the rules to the limit in order to succeed.

‘Sometimes, you overstep the mark, and the company has to row back, apologise, or even pay a fine,’ adds the source.

‘In China, it doesn’t work like that. Get caught, and you’ll go to prison.’

Trouble began in 2012, when an anonymous whistleblower, thought to be a disgruntled GSK employee, began sending emails to China’s healthcare regulator, making wild allegations about sales practices.

A total of 23 messages were sent, alleging that GSK staff were routinely bribing doctors and healthcare professionals with the authorisation of senior managers. However they were short on details. In January last year, the stakes were raised, significantly.

An 11-page email was dispatched from the address ‘gskwhistleblower@gmail.com’. In its subject line it claimed to contain a ‘notification of bribery by GSK in China’.

The email — a copy of which has been passed to the Daily Mail — alleged that the firm ‘has engaged in illegal marketing and large-scale bribery to sell its products to Chinese hospitals and doctors’.

It claimed, among other things, that sales staff were wired £1,000 each month from a Citibank account to wine, dine, buy prostitutes for, and pay cash bribes to ‘key decision-makers’ in the purchasing departments of hospitals.

The email named names and gave dates. It told how attempts were made to conceal payments, and accused the firm of doing little to prevent endemic bribery.

It would later end up in the hands of the police, who appeared to quote it (at times verbatim) in May this year, while outlining potential charges against not just Mr Reilly, but 45 of his Chinese colleagues.

‘Is what the email alleges true? I have no idea,’ says the Shanghai source. ‘Even if it is, Mark didn’t know every detail of what went on. He hardly spoke Chinese, for starters.

How could he have known? Shanghai is a very fast city. It’s easy to get caught up in the idea that everyone’s a bit dodgy and you have to do dodgy things to get along. If the allegations are true, I could see how it could have happened. But he’s no crook.’

Unfortunately, for Reilly, his case nonetheless struck a potent political chord. The Beijing government is attempting to crack down on a ‘backhander culture’ traditional in Chinese business circles, and GSK, as a wealthy multinational, makes an ideal target.

‘By coming down hard on someone like Reilly,’ says Prof Lam, ‘the authorities can show people that bribery is something they are taking seriously.’

If that was indeed their aim, they were handed a further gift in March last year, when a second email was sent, from the same address, to a separate group of senior staff.

This added details to corruption claims, claiming that doctors and their families were given free holidays in India, Brazil and Japan by GSK, under the guise of attending conference. Agencies were hired to organise luxury travel, and hand them thousands of dollars in cash as ‘speaking fees’, it said.

Attached to the email was large computer file. It contained the tape of Reilly and his mistress. The video was shown to Reilly soon afterwards, during a visit to GSK’s headquarters in London.

He promptly returned to Shanghai and hired a fellow British national, private investigator Peter Humphrey, to establish who had leaked it.

That investigation was still ongoing in late June last year when police carried out their high-profile raid on GSK’s offices. Mr Reilly promptly flew to the UK, on a scheduled holiday.

However several weeks later, he bizarrely decided to return to China to (as GSK put it) ‘help police with their inquiries’.

That move, which of course led to his detention, has until now been shrouded in mystery, since it seems inconceivable a right-thinking British citizen facing any prospect of prosecution in a country such as China should freely travel there.

However, I understand that Reilly was at least partly motivated to return in an ill-fated effort to suppress the sex tape.

‘At the time, you have to remember that Mark was a married man,’ says a close friend. ‘His wife did not know that he had committed any indiscretion.

Posted on Monday 30 June 2014

A year ago, we first began to hear about a GSK bribery scandal in China [an irreducible conflict…]. Pharmagossip has kept us up on the developments. Now this:
Daily Mail
By Hugo Gye
29 June 2014

A covert sex tape involving a senior executive and his Chinese lover was the trigger for a major investigation into corruption at British drugs giant GlaxoSmith-Kline, it was revealed yesterday. The video of married Mark Reilly and his girlfriend was filmed by secret camera and emailed anonymously to board members of the pharmaceutical firm. It led to an investigation that has rocked the £76billion company – which stands accused of bribing doctors and other health officials in China with £320million of gifts, including sexual favours from prostitutes, to persuade them to prescribe its drugs.

Mr Reilly, who ran the company’s Chinese business, was charged six weeks ago with running a ‘massive bribery network’ involving £90million of illegal sales and banned from leaving the country. It was the culmination of a year-long corruption investigation into the FTSE 100 firm. But yesterday, it was revealed the scandal first erupted after the sex tape was emailed by ‘GSK whistleblower’ to board members, including chief executive Andrew Witty, in March 2013, in what was believed to be a threat or blackmail attempt. The footage showed father-of-two Mr Reilly, who is separated from his wife, having sex with his Chinese girlfriend.

He was given permission to hire investigator Peter Humphrey, 58, to find out who had hidden the camera in his Shanghai flat and who had sent two separate emails making serious fraud allegations. The £20,000 probe, codenamed Project Scorpion, focused on disgruntled former employee Vivien Shi, 49, a prominent businesswoman whose family is part of Shanghai’s communist elite. But a few months after starting to investigate Miss Shi, Mr Humphrey was arrested along with his wife Yu Yingzeng, a US citizen and daughter of one of China’s most eminent atomic weapons scientists. According to the Sunday Times, Mr Humphrey’s arrest and detention in July was at around the same time that China began a police probe into GSK’s alleged bribery.

Mr Reilly, 52, of Sawbridgeworth, Hertfordshire, stepped down from his post as China manager soon after Mr Humphrey’s arrest but remains a GSK employee. He returned to Britain around the same time but voluntarily went back to China within days to assist police with their inquiries. He was charged in May this year and accused by police of presiding over a web of corruption and pressing his sales teams to bribe health officials to meet targets…
hat tip to pharmagossip…  
It feels odd reporting a story that seems like it belongs in a check-out line tabloid rather than a medical blog, but that’s where you end up if you follow the pharmaceutical industry. I reckon Reilly’s sex life is actually his business, but hundreds of millions in bribes is everybody’s business. And in this case, the charge is directed against an actual person:
If found guilty, Mr Reilly, who has a PhD in pharmacology and neurosciences from University College London, could face life in prison. Mr Reilly joined GSK in 1989 and has worked in Singapore, Hong Kong and China. He is separated from Jill, 49, with whom he has two teenage daughters, and has moved out of their £1.2million home. It is understood he met Mrs Reilly at university, where she was studying psychology. Like her husband, she took up a post at GSK, working as a director of capital planning…
Two things. First, it has long been the opinion of people watching the misbehavior of the pharmaceutical industry that until the executives in charge start heading off to jail, the corruption will continue under the cost of doing business rule. And so far, Reilly seems to be pretty vulnerable to Chinese justice and jail. Second, it’s inconceivable to me that payoffs of this magnitude could be made without being known all the way up the chain of command. These companies roll through money as if they’re small countries, but the numbers involved here are a good deal more than petty cash.

In with no echo…, I was hypothesizing that by settling out of civil and criminal suits, the pharmaceutical companies avoid any verdict, and invariably quickly say “we admit to no wrongdoing” implying that they settled for who-knows-what reason [like admitting to the least ignoble of the charges]. In doing that, they dampen the incriminating story which then fades quickly – the anechoic effect [see echo echo echo echo echo echo…]. The most obscene version was GSK settling a $3B suit and signing this agreement – then writing a response in a letter to the Chronicle of Higher Education that denies admission of guilt [see the only enduring contract…]. The way this China-gate story is going, it doesn’t at this point look like that’s going to be an option. This is just plain old crime, and one that has the Chinese up in arms [as it should].

And there’s more:
Last month, Britain’s Serious Fraud Office announced it is to investigate the company’s ‘commercial practices’.

GSK.. Famous In China For All The Wrong Reasons…


“…Mr Gisserot said GSK’s vaccines business would be its strongest source of growth in coming years, highlighting the potential of its Cervarix jab to protect young women from cervical cancer…”

GSK are famous in China.. for all the wrong reasons…

That’s according to GSK’s new head of their China division (the replacement for the scandalous Mark Reilly ) – Hervé Gisserot..

I wonder when GSK will atone all the Seroxat damage that they caused to many thousands of us?…

I won’t hold my breath… considering one of Hervé’s drugs he aims to push on the Chinese is GSK’s Cervarix...

Cervarix is proving to be yet another controversial GSK drug but that won’t stop GSK and Hervé Gisserot pushing it in the new Chinese market will it?..

The side effects from Cervarix have been leaking out in the media since 2009, see the Telegraph for more:

Cervarix: the simple injection causing so much controversy

The cervical cancer jab Cervarix is currently under scrutiny after nearly 1,500 Britons have experienced adverse reactions to it.

Carly Steele has not felt right since receiving the cervical cancer vaccine, Cervarix - Cervarix: the vaccine causing so much controversy

Carly Steele has not felt right since receiving the cervical cancer vaccine, Cervarix Photo: RII SCHROER

Amanda Steele first noticed a change in her daughter Carly last summer. The normally exuberant 13-year-old had lost all of her energy. Whereas normally she would have spent her days outside on the trampoline, she now found it difficult to leave the sofa. It was even a struggle to walk unaided to the bathroom.

 

The blackouts, when they came, were more worrying. Mother would find daughter out cold on the floor of their Stockport home. Every joint in Carly’s body ached, and simple tasks such as washing her hair became impossible. Carly, on the brink of womanhood, suddenly seemed more like a toddler. It is six months now since she last attended school.

 

“It is like the light has gone out in her eyes,” says her mother. “It is absolutely heartbreaking to watch.”

 

At first, the doctors blamed vertigo. Then came a diagnosis of the balance disorder Labyrinthitis. Next, ME was suggested. Amanda is not convinced any of these conditions are implicated. What she believes is that Carly’s condition is related to the cervical cancer vaccine she received last year.

 

“The doctors all look at me like I am an idiot when I bring up the possibility of the jab having this effect on her, but she was a healthy, happy girl before she had it and now she isn’t, and I simply can’t believe that it has nothing to do with it.”

This week, relief of sorts arrived for the Steele family in the shape of a government report detailing the 1,340 instances of adverse reactions to the vaccine, Cervarix. Some girls have suffered paralysis, others convulsions; and some, like Carly, have experienced sight problems (in addition, Carly has now developed severe heat intolerance). Nausea, muscle weakness, fever, dizziness and numbness have also been reported.

 

Last updated: November 26, 2015 1:08 pm

GSK confident of China renaissance

 

GlaxoSmithKline has predicted a return to growth in China next year as it slowly begins to repair the damage from a corruption scandal which shattered the company’s reputation in one of the world’s most important pharmaceuticals markets.

In the most detailed account yet of its recovery efforts in China, GSK said it had rooted out the bribery that resulted in a record Rmb3bn ($488m) Chinese fine and halted the haemorrhaging of sales that has shrunk the business by more than a fifth.

Hervé Gisserot, GSK’s general manager in China, forecast renewed growth from this much-diminished base next year but said he had no desire to rekindle the breakneck expansion that led the company into crisis.

“We added a floor every year without making sure the building had the foundation to be sustainable,” he said. “My job now is to make sure the foundations are fit for future growth.”

Mr Gisserot admitted that GSK had become famous in China “for the wrong reasons” after being found guilty last year of what prosecutors described as “massive and systematic bribery” of doctors and health officials to boost prescriptions of its drugs.

But he promised to put the company at the forefront of efforts to clean up the Chinese pharmaceuticals market — behind only the US in size — after a radical overhaul of its sales and marketing model to reduce the risk of corruption.

The pharma model in China is not sustainable . . . others will have to adjust– Hervé Gisserot, GSK’s general manager in China

Measures include severing the link between sales and remuneration for GSK sales representatives, no longer paying doctors for speaking on the company’s behalf, and a ban on cash reimbursement for entertainment expenses.

Mr Gisserot warned that other companies risked punishment by Chinese authorities if they failed to follow GSK’s reforms. “I cannot believe GSK is a one off. This anti-corruption [drive] will continue. I hope others will learn before it is too late.”

GSK’s revenues in China fell 23 per cent between 2012 and 2013 and its sales force dropped from 5,000 to 3,000 as doctors shunned the company in the wake of the scandal. But the business has since stabilised and remains profitable.

Herve Gisserot©AFP

Hervé Gisserot, GSK’s general manager in China

After a modest upturn next year, Mr Gisserot predicted more “dynamic” growth from 2017 but said the days of double-digit annual expansion in the Chinese drugs market were over as the government tries to drive down prices. “The pharma model in China is not sustainable . . . others will have to adjust.”

Mr Gisserot said GSK’s vaccines business would be its strongest source of growth in coming years, highlighting the potential of its Cervarix jab to protect young women from cervical cancer.

China represented less than 3 per cent of GSK’s global sales last year at about £580m but is a strategically important part of the wider push by Sir Andrew Witty, chief executive, to tap rising demand for healthcare in the developing world.

GlaxoSmithKline navigates difficult path in China after scandal


November 26, 2015 4:36 pm

GlaxoSmithKline navigates difficult path in China after scandal

New rules to tackle corrupt practices leave drugmaker at a commercial disadvantage, say industry peers
File photo of a Chinese national flag fluttering in front of a GlaxoSmithKline (GSK) office building in Shanghai...A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai in this July 12, 2013 file photo. British drugmaker GlaxoSmithKline used travel agencies and consultancies as vehicles to bribe officials and doctors and illegally boosted the sales prices of its drugs sold in China, police said on July 15, 2013. REUTERS/Aly Song/Files (CHINA - Tags: BUSINESS)©Reuters

When Hervé Gisserot was asked to ride to the rescue of GlaxoSmithKline’s crisis-hit Chinese operations in 2013, the job must have looked to be a poisoned chalice.

His predecessor, Mark Reilly, was under criminal investigation — and later detained under house arrest — for his part in a corruption scandal that led to GSK being handed the biggest fine in Chinese history.

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Since arriving in Shanghai two years ago, Mr Gisserot has remained largely out of public view as he has sought to salvage GSK’s position in the world’s second-biggest pharmaceuticals market after the US. The fact he is now willing to talk openly for the first time about the crisis suggests the Frenchman thinks the worst has passed.

“The mindset was more, more, more,” he says, describing the hard-selling culture that prevailed at GSK before Chinese investigators uncovered the web of bribery used to encourage doctors to prescribe its drugs. “We will not win in the future as we have in the past 10 years. We have to invent a new model.”

After years of lax oversight that ended in disaster, GSK now has the toughest anti-graft rules in the Chinese market. Sales representatives are no longer paid according to how many drugs they sell — removing one of the main incentives for bribery. Doctors, meanwhile, are no longer entertained by GSK reps on expenses, nor paid to speak on the company’s behalf at promotional events. The company no longer uses Chinese travel agents. Instead, every receipt submitted by a rep is now checked by in-house compliance officers who have tripled in number since the crisis.

Mr Gisserot hopes these measures will greatly reduce the risk of corruption and help repair the company’s reputation by eliminating many of the opportunities. In the past, faked lunch receipts were used to generate cash for bribes and doctors were paid for speaking engagements that never took place.

Whether the changes will lead to recovery in the business is another question entirely at a time when GSK is in urgent need of fresh growth after a period of declining global sales. Its earnings per share fell both last year and this, and its biggest drug, the asthma treatment Advair, could soon face generic competition.

We fully support that sales is not the only factor. But performance has to be one element of compensation

Several industry figures and drug reps told the Financial Times they believed the new model would leave GSK at a commercial disadvantage in China and other emerging markets. One rep said that “doctors will only prescribe GSK drugs if they have to”; given a choice, they are more likely to opt for the product whose reps are still able to offer incentives.

Even if western drugmakers are increasingly avoiding paying direct bribes, some still turn a blind eye when it is carried out by local partner companies, the reps say.

A compliance officer at a competing western drugmaker says that an audit of payments to doctors for speaking at medical meetings revealed 60 per cent of events never took place. In other words, doctors received money for nothing.

In contrast, the best a Chinese doctor can expect when meeting a GSK rep is a lunchbox worth Rmb60 ($9.40). Reps, meanwhile, have had their base salaries increased from 60 to 75 per cent of total potential remuneration, with the remainder made up by a new bonus system based on measures including a test of their product knowledge and a GPS tracking system that logs their number of meetings with doctors.

The only element of the bonus linked to sales is tied to GSK’s overall performance in all emerging markets.

Mr Gisserot says reps have responded well to the changes. However, any enthusiasm is not universal. One GSK salesman complained to the FT that his overall pay had fallen 25 per cent under the new model. He also claims to have already found ways to get around rules designed to make corruption impossible.

Speaking on condition of anonymity, he explains how he uses the GPS-enabled iPad intended to monitor interactions between sales staff and doctors near a hospital, without actually meeting any doctors. “Sometimes I just spend the time in a coffee shop near the hospital,” he says.

Inside Business

GSK and the perils of prudence

A GlaxoSmithKline Plc logo sits on glass windows at the company's headquarters in London, U.K., on Thursday, July 11, 2013. Glaxo is suspected of trying to increase sales channels and prices by using avenues such as travel agencies to bribe or sponsor projects of government officials, medical associations, hospitals and doctors, and faking tax receipts, China's Ministry of Public Security said on its website today. Photographer: Simon Dawson/Bloomberg

Pharmaceuticals group has been given the benefit of the doubt. Now the pressure is on

Read more

To collect his basic salary, he says, it is enough just to pass the medical knowledge tests that GSK administers periodically — giving him ample opportunity to quadruple his salary by working on the side for a domestic pharmaceutical company. That company still upholds a policy of allowing him to hand out cash to doctors to boost sales, and he is able to earn several multiples of his GSK salary as a result.

GSK will hope this anecdotal abuse of its system is an exception, although the salesman says the practice is widespread. The UK company has a lot riding on its ability to make the new model work and so too do Chinese authorities whose clampdown on GSK appeared motivated at least in part by a desire to catalyse change in the pharmaceuticals market.

Mr Gisserot says GSK will have first-mover advantage when the rest of the industry eventually follows its reforms. “I think it will be a domino effect,” he says. “It will be hard for other players to explain why they are sticking to the old model.”

But many in the sector remain sceptical. Numerous industry figures and sales reps in China say that while most companies have tightened their rules, bribery is still widespread. In addition, there is a common view that another GSK-style prosecution is unlikely and therefore companies do not feel under pressure to make fundamental changes.

According to this argument, bribes will remain a cost of doing business as long as poorly paid doctors demand the money to top up their salaries. This will only happen as part of wider healthcare reforms likely to take many years.

GSK is introducing similar compliance models around the world, reflecting the belief of Sir Andrew Witty, chief executive, that, as conflicts of interest between drugmakers and medics face scrutiny from China to the US, it is better to embrace the trend rather than wait for enforced change. Instead of being incentivised solely to sell pills, GSK wants its reps to be respected by doctors as sources of quality information and advice.

The head of one western drugmaker in China insisted it was a mistake to remove animal spirits from sales reps entirely. “To stop linking pay to performance is something we do not understand. We fully support that sales is not the only factor. But performance has to be one element of compensation.”

Mr Gisserot says his counterparts are gambling on the ability of their compliance departments to spot transgressions. “When you have an incentive scheme, it is because you want to drive behaviour . . . If you keep it you create risk. As a legal representative [of GSK in China], I would not feel comfortable about that.”

GSK Investigators (Scapegoats?) Peter Humphey and Yu Yingzeng- Released From Chinese Prisons this Week


A Glaxo spokesman acknowledged last summer that ChinaWhys had been hired to conduct due diligence.

Mr. Humphrey’s son, however, has said in interviews that when he spoke with his father in prison, Mr. Humphrey suggested Glaxo had allowed him to fall into a trap by focusing on the identity of the whistle-blower rather than the accusations the whistle-blower made against the company.

A Glaxo spokeswoman declined to comment on Tuesday. But in an article in The Daily Telegraph in August, Harvey Humphrey was quoted as saying: “I would not blame this on China. The cause is not the Chinese, it is G.S.K.”

http://www.nytimes.com/2015/06/10/business/international/british-investigator-peter-humphrey-is-released-from-chinese-prison.html?ref=business&gwh=E41AF9D61C33F5C501A1555C82450CC1&gwt=pay&_r=0

Photo

Peter Humphrey was admitted to a hospital because of poor health, his family said.

SHANGHAI — Peter Humphrey, a British private investigator who was detained two years ago while working for the pharmaceutical giant GlaxoSmithKline, was released from prison on Tuesday with seven months to go in a two-and-a-half-year sentence, according to friends and family members.

The Shanghai authorities released Mr. Humphrey, 59, early Tuesday morning and admitted him to a hospital because of poor health, his family said. Once tests are conducted, close friends and relatives say, he is expected to be issued an emergency passport and deported to Britain by the Chinese authorities.

Mr. Humphrey’s arrest in the summer of 2013 coincided with a Chinese government investigation into accusations of fraud and corruption at the drug company. Although Mr. Humphrey was not charged in connection with that case, his friends and relatives believed he was detained because of work he had been conducting for Glaxo.

In a separate case, Glaxo was eventually fined nearly $500 million, one of the largest fines in corporate history in China, for engaging in fraud and bribery. One of the company’s top executives in China was also charged with wrongdoing in the case. The authorities then suspended the three-year prison sentence of the executive, Mark Reilly, and ordered him deported.

Mr. Humphrey and his wife and business partner, Yu Yingzeng, a Chinese-born American citizen, were charged with violating the rights of private citizens by obtaining private information about them while operating ChinaWhys. The company, an investigation firm, regularly performed due diligence for multinational corporations in China.

Ms. Yu, who is 61, was sentenced last year to two years in prison, and she is expected to be released within a month. There was no indication Tuesday that her sentence had been reduced. The sentences for her and her husband took into account time served since their arrests.

British officials issued a two-sentence statement, without naming Mr. Humphrey: “We have been notified by the Chinese authorities that a British national detained in China has been released. We are providing consular assistance to the family.”

In a statement released Tuesday by the Humphrey family, the couple’s son, Harvey, who is a university student in Britain, said: “I’m stunned and delighted. I hope to see both of my parents as soon as possible.”

The Humphrey case shocked the international community in China because ChinaWhys had worked for some of the world’s biggest companies and had typically been hired to help root out corruption. But the case highlighted the risks of doing such work in China, and it suggested that investigative firms were sometimes paying to obtain access to confidential government records.

At their one-day trial in August, Mr. Humphrey and Ms. Yu acknowledged that ChinaWhys had bought government-issued identity records, exit and entry travel documents, and mobile phone records, according to transcripts and video excerpts. The trial was closed to the news media, but the couple said they had believed that obtaining many of the records was legal.

Looming behind the trial, though, was the Glaxo case. The pharmaceutical company hired ChinaWhys to investigate a breach in privacy related to the company’s China general manager, Mr. Reilly, but also to look into the identity of a whistle-blower who had sent emails and documents to the authorities in China, according to people involved in the case.

The company suspected that the whistle-blower was a former Glaxo employee, according to people familiar with the case. The whistle-blower sent emails to Glaxo executives and board members, along with a videotape that appeared to show Mr. Reilly, the company’s top executive in China, having sex with his girlfriend in his Shanghai apartment.

A Glaxo spokesman acknowledged last summer that ChinaWhys had been hired to conduct due diligence.

Mr. Humphrey’s son, however, has said in interviews that when he spoke with his father in prison, Mr. Humphrey suggested Glaxo had allowed him to fall into a trap by focusing on the identity of the whistle-blower rather than the accusations the whistle-blower made against the company.

A Glaxo spokeswoman declined to comment on Tuesday. But in an article in The Daily Telegraph in August, Harvey Humphrey was quoted as saying: “I would not blame this on China. The cause is not the Chinese, it is G.S.K.”

http://www.bbc.co.uk/news/world-asia-china-33090372

China frees wife of UK GSK investigator Peter Humphrey

  • 11 June 2015
  • From the section China
Mr Humphrey and Yu Yingzeng were convicted in China last August

The wife and business partner of a British corporate investigator jailed in China for trafficking personal data has been freed early from prison, the BBC understands.

Yu Yingzeng, a Chinese-born US citizen, was jailed with her husband Peter Humphrey as part of the GlaxoSmithKline corruption scandal last August.

Mr Humphrey was released earlier this week.

They are expected to leave China in the coming days.

Yu Yingzeng was detained along with Mr Humphrey in 2013.

She was sentenced last year to two years in prison and had been due to be released on 11 July.

The couple said they did not realise their actions were illegal in China

The couple were detained after helping GSK investigate a secretly filmed sex tape of its then top manager in China.

GSK was fined £300m ($465m) by the Chinese authorities for bribes to hospitals and officials in an attempt to boost sales.

The couple were found guilty of illegally obtaining Chinese citizens’ data and selling it to firms including GSK China.

They both admitted buying background information, but said they did not realise this was illegal.

Mr Humphrey was released on health grounds and has been moved to a Shanghai hospital for tests relating to cancer.

He will be deported on release from hospital.

The couple’s family has been told their departure from China could take several days.

Their son, Harvey, a university student in the UK, has not had access to them.

How the case unfolded:

  • January 2013: Email alleging bribery sent to GSK boss, followed in March by sex tape featuring China chief Mark Reilly
  • April 2013: Peter Humphrey’s company ChinaWhys hired to investigate
  • June 2013: Mr Humphrey delivers his report to GSK
  • July 2013: China announces investigation into GSK China, police detain four Chinese GSK employees
  • August 2013: Mr Humphrey and his wife arrested for allegedly buying and selling personal information
  • May 2014: Chinese authorities accuse Mr Reilly of overseeing bribery network
  • August 2014: Mr Humphrey and his wife go on trial and are convicted
  • June 2015: Mr Humphrey is freed from prison

As We Expected.. No Jail Time For GSK’s Mark Reilly In China…


The pharma firm’s former China boss is said to escape jail time as GSK tries to draw a line under a “deeply disappointing” matter.

A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai

GSK acknowledged wrongdoing in its statement

GlaxoSmithKline (GSK) has been fined almost £300m by a court in China – a record in the country – for bribing health officials to use its products.

The pharmaceutical firm confirmed the £297m penalty imposed by the Changsha Intermediate People’s Court in Hunan Province, saying it accepted that illegal activities took place and the fine would be paid through existing cash resources.

The Chinese state news agency, Xinhua, reported that the former head of GSK in China and other executives faced jail terms but a GSK source told Sky News that Mark Reilly was to be deported after being handed a three-year suspended sentence.

The company’s statement said the court found that “GSK China Investment (GSKCI) …offered money or property to non-government personnel in order to obtain improper commercial gains.

Mark Reilly of GSK
Mark Reilly used to run GSKCI

“The illegal activities of GSKCI are a clear breach of GSK’s governance and compliance procedures; and are wholly contrary to the values and standards expected from GSK employees.

“GSK has published a statement of apology to the Chinese government and its people on its website.

“GSK has co-operated fully with the authorities and has taken steps to comprehensively rectify the issues identified at the operations of GSKCI.

“This includes fundamentally changing the incentive programme for its salesforces (decoupling sales targets from compensation); significantly reducing and changing engagement activities with healthcare professionals; and expanding processes for review and monitoring of invoicing and payments.”

GSK chief executive Sir Andrew Witty added: “Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK.

“We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country and its people.”

The investigation took a number of twists with a British man, who was hired as an investigator by GSK, being jailed for two years and six months in August.

The Chinese authorities claimed Peter Humphrey illegally obtained Chinese citizens’ personal information and sold it to companies including GSK.

Peter Humphrey China Charges GSK
Peter Humphrey’s health is said to be poor

The London-listed firm hired him after an anonymous email, containing a sex tape of Mr Reilly and his Chinese girlfriend, was sent to senior management in January last year.

The email alleged corrupt practices in GSK’s China operation.

GSK’s ethical standards have also been called into question in Lebanon, Iraq, Jordan,Syria and Poland.

Its share price was almost 0.6% higher in the wake of the announcement.

Open Trial Set For Two GSK Private Investigators In China Bribes Probe


Topics:

China sets trial date for GSK-tied investigators, says it will be ‘open’

Peter Humphrey

It’s official: China has set the date for the trial of two private investigators tied to GlaxoSmithKline’s operations there. The pair will head to court in just over a week on charges of illegally purchasing personal information about Chinese nationals, a Chinese court said. And according to state news agency Xinhua, all are welcome to attend.

U.K. national Peter Humphrey and Yu Yingzeng, Humphrey’s wife and a U.S. citizen, will stand trial on Aug. 8, the Shanghai No. 1 Intermediate People’s Court announced Monday, according to The Wall Street Journal. Contrary to previous reports, Xinhua now says it will be open to the public. The pair has been in the custody of Chinese authorities since last August.

Since then, information has slowly emerged concerning the couple’s relationship to Glaxo, which came under fire last summer for allegedly funneling $489 million in bribes to Chinese doctors and other healthcare professionals. Earlier this month, reports surfaced that the pharma giant had hired Humphrey’s firm, ChinaWhys, to investigate a former employee accused of making a sex tape of top China exec Mark Reilly without his knowledge–and circulating it via email to other Glaxo higher-ups, including CEO Andrew Witty.

Now, Chinese prosecutors say Humphrey and Yingzeng “illegally trafficked a huge amount of personal information on Chinese citizens to seek profits,” state news agency Xinhua reported earlier this month. Among the information: home registrations, background on family members and call logs, some of which they allegedly purchased illegally. And they’re accused of tailing people and secretly photographing them, too.

But the trial itself has stirred up its own controversy, with Reuters recently reporting that China had barred all outsiders–including the couple’s teenage son–from attending. Officials from both the U.S. and the U.K. have since stepped in to demand more transparency, with a U.S. embassy spokesman recently citing a 1982 agreement under which consular officials should be granted access.

– get more from the WSJ (sub. req.)
– read the Xinhua story

Special Report: Top 10 drugmakers in emerging marketsGSK

Related Articles:
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Sex, bribes and videotape: Clandestine video of GSK exec adds to China scandal
Top GSK exec faces life in Chinese prison for alleged ‘massive bribery network’

China to try GSK couple ‘in secret’


http://www.ft.com/cms/s/0/864a9208-020c-11e4-ab5b-00144feab7de.html#axzz36M0MEd00

July 2, 2014 7:29 pm
China to try GSK couple ‘in secret’
By Tom Mitchell in Beijing and Andrew Ward in London,
©CNTV

Peter Humphrey on China state television

The British investigator and his American wife and business partner detained in China because of their work for GlaxoSmithKline will be tried in secret as concerns grow about their health, according to people close to the family.
US consular officials were informed on Wednesday by Chinese authorities that they would not be able to attend the trial of Peter Humphrey, and his wife, Yu Yingzeng, “on grounds of privacy”, a family friend told the Financial Times. The trial, originally scheduled for July 29, has been delayed until August 7.

The couple ran a Shanghai-based investigative firm and were hired in April last year by GSK to look into who had placed a camera in the bedroom of the British pharmaceutical firm’s top manager in China, Mark Reilly. A film of Mr Reilly in bed with his Chinese girlfriend had been emailed to GSK’s chief executive, Andrew Witty, in March that year.
While trials in China are often closed on grounds of national security, closing one because of alleged concerns over privacy is extremely rare.

Mr Humphrey and Ms Yu were also looking into the source of a series of emails sent to Chinese regulators in 2012, alleging that corrupt practices were rife at GSK’s China operations. Mr Reilly, who left China when they were arrested and then returned to Shanghai to aid in their investigation, was this May one of 46 employees identified by the Chinese police as a suspect implicated in “massive and systemic bribery”.

The couple will face one charge of illegally purchasing private information. Another charge, of running an illicit business, has been dropped.
Chinese officials also indicated that the couple’s teenage son, who has not seen his parents since they were detained a year ago in Shanghai, will be barred from the court proceedings.

“I am very worried that family and consular officials are not allowed to attend my parents’ trial. This does not involve state secrets. This does not involve national security. It is about two private individuals, my parents,” Harvey Humphrey said in a statement. “I am surprised at this decision since China wants to promote openness and the rule of law and I hope that they will let me in. I am shocked and upset. I miss my parents, who are not in good health.”

A former journalist, Mr Humphrey was regarded as one of the most experienced investigators working in China. He and Ms Yu founded their firm, ChinaWhys, in 2003 and ran it together in a close partnership. Mr Humphrey was the public face of the business while his wife focused on day-to-day operations.

According to two people close to the family, Mr Humphrey is suffering from a hernia and has difficulty walking and standing. Ms Yu, a China-born US citizen, has kidney problems.
Mr Humphrey and Ms Yu were originally detained in Shanghai on July 10, 2013. Shanghai police travelled to Beijing on the same day to search the couple’s Beijing home, according to one person close to the family.

GSK did not until earlier this week confirm it had employed them. Friends of the couple have expressed concern the British company did not fully brief them of the seriousness of the corruption allegations it was facing, the most detailed of which were outlined in two emails sent to GSK directors in January and May of 2013. GSK declined to comment.
According to the family friend, Ms Yu told US consular officials that “we got caught up in a war unintentionally, but I have no grudges”.

GSK Bribery In China: Was (GSK’s ‘Alleged’ Corruption King Pin) Mark Reilly’s Sex Tape Sent To Andrew Witty?


Strange story from the Daily Mail UK:

http://www.dailymail.co.uk/news/article-2673963/How-secret-sex-tape-plunged-British-drugs-giant-Glaxo-90million-bribery-probe.html


How a secret sex tape plunged British drugs giant Glaxo into a £90million bribery probe

  • Executives at GlaxoSmithKline were sent a sex tape featuring China boss Mark Reilly and his girlfriend 
  • They hired a private investigator to work out who had sent the video 
  • But after he probed a powerful businesswoman, the Chinese authorities cracked down on Glaxo amid allegations of fraud and bribery 
  • Mr Reilly has been charged with illegally selling £90million worth of drugs

By HUGO GYE

Probe: Glaxo's China boss Mark Reilly was caught on camera having sex with his Chinese girlfriend

Probe: Glaxo’s China boss Mark Reilly was caught on camera having sex with his Chinese girlfriend

The bribery probe which has rocked British drugs giant GlaxoSmithKline was sparked by a secretly filmed video showing one of the firm’s managers having sex with his girlfriend, it was claimed today.

The £76billion pharmaceutical company is under investigation in China for allegedly bribing doctors and other officials in order to increase the price of Glaxo’s drugs.

Now it has been reported that the scandal started after a sex tape featuring the firm’s China chief was emailed to senior staff including chief executive Andrew Witty in March 2013.

The footage showed Mark Reilly and his Chinese girlfriend, and was filmed inside his flat in Shanghai, according to the Sunday Times.

After it was sent to Mr Witty and others, Glaxo hired private investigator Peter Humphrey to determine how the video had come to light.

It was thought that the sex tape must have been filmed by someone who had access to Mr Reilly’s apartment building.

Glaxo agreed to pay Mr Humphrey £20,000 for his investigation, which focussed on the company’s former employee Vivian Shi.

However, monitoring the prominent businesswoman appears to have brought him to the attention of the Chinese authorities, and Mr Humphrey was arrested in July last year.

This was around the time that China began a police probe into Glaxo’s alleged bribery – the biggest investigation into a foreign company for more than a decade.

It emerged that, as well as the sex tape featuring Mr Reilly, senior executives had been sent two emails detailing allegations of corruption in the firm’s Chinese division.

Mr Reilly, 52, who is separated from his wife, stepped down as Glaxo’s China boss last July, but after he agreed to return to the country to be interviewed by police he was banned from leaving again.

Email: The footage was apparently sent to executives including chief executive Andrew Witty

Six weeks ago, he was officially charged with bribery and fraud, accused of being involved in £90million of illegal sales.

Soon afterwards, Britain’s Serious Fraud Office announced that it would investigate Glaxo’s ‘commercial practices’ in a probe thought to be linked to the Chinese allegations.

Glaxo told the Sunday Times: ‘The Chinese authorities are continuing their investigation into GSK’s China business.

‘We respect their process and investigation and are co-operating fully.’

The drugs firm has previously admitted that some of its Chinese executives had apparently broken the law in marketing its products to doctors.

Read more: http://www.dailymail.co.uk/news/article-2673963/How-secret-sex-tape-plunged-British-drugs-giant-Glaxo-90million-bribery-probe.html#ixzz3640ToUiF
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Copy-of-NIP0000948_1078376k

Will GSK Withdraw From China Altogether? How Much Will China Fine GSK For Bribery? Will Mark Reilly Sing Like a Canary?


imgres

The current GSK China-gate scandal (which involved a massive 500 million dollar bribery network spanning hundreds of individuals across China) is fast becoming like something straight from a John Le Carre spy novel.

It looks like the Chinese authorities intend to prosecute-  the former GSK head of their Chinese division- Mark Reilly. He could technically face life in prison for what the Chinese claim to be, an extensive bribery network directed by Reilly, involving hundreds of millions of dollars, and several hundred people (including drug reps, Chinese GSK executives, doctors, fake travel agencies, and prostitutes). It will be interesting to see if the Chinese do send Reilly to prison, but what will be even more interesting is- who was above Reilly? and were they directing, or ordering him, to set up this bribery network, which apparently has been in place since around 2009. Will Reilly do a plea bargain with the Chinese authorities, and in return for lesser sentencing, perhaps he will expose others further up the food chain? Only time will tell.

At the moment all we have is speculation, but it is intriguing speculation nonetheless. Another interesting aspect of this China-gate drama is the matter of GSK and their future in China. It has been rumored that, as a result of this Chinese bribery scandal, and a loss of Chinese profits, that GSK might decide to abandon China altogether. Personally, I would be shocked if GSK decide to abandon China altogether – but it will be interesting to see how this saga all unfolds…

http://www.comply.net.cn/Arc-v.Asp?ID=949

 “GSK is rumored to withdraw completely from the Chinese market.  Although GSK denied this rumor, it nonetheless withdrew from RDPAC (i.e., The China Association of Enterprises with Foreign Investment R&D-basedPharmaceutical Association Committee).  In response to why GSK withdrew from RDPAC, GSK explained that it is the concern of GSK that the ongoing investigation of the Chinese government might impact the operation of RDPAC, and the withdrawal is voluntary”

There has also been speculation that the Chinese intend to fine GSK up to 3Billion dollars for their crimes in China. This figure would echo their previous fine for over 3 Billion by the US authorities in 2012. Although it sounds like a massive fine, and to the mere mortal it is astronomical, to a drug company like GSK, a few billion in fines has always been just the cost of doing business, therefore I suspect they will view their Chinese fine in the same way. Despite being clearly one of the most corrupt and fraudulent international companies in the world, in their home country of Britain, GSK are treated like royalty. They operate above the law because they are the UK cash- cow, they are long established as a major UK corporation, and they even have the backing and support of the UK prime minister, David Cameron, and George Osborne, the UK Chancellor. It will be interesting to see if the downfall of Mark Reilly (and who he might decide to bring down with him) changes that scenario… stay tuned.

For more on GSK, Mark Reilly and China-gate, check out some of these recent posts from award winning blogger, Bob Fiddaman, of Seroxat Sufferers.

This is his latest one:

Wednesday, May 14, 2014

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

[
GSK’s Mark Reilly faces up to 10 years in prison

Thought I’d give my take on GSK and the recent [ahem] bribery scandals in various parts of the world. I say ‘my take’ because it’s something that GSK or their highly paid attorney’s can’t ‘take’ from me. It’s mine and I wish to share it.

So, news today that Chinese officials have charged the former British boss of GSK’s China operations.

And what have they accused him of?

Well, nothing out of the ordinary [by GSK’s standards that is]

Mark Reilly fled China when the going got tough. He later returned, not as a goodwill gesture – he returned because the Chinese police wished to interview him, a result of which saw him arrested then, some months later, charged with offences relating to bribery.

GlaxoSmithKline CEO, Andrew Witty, has kept quiet since his initial statement he made midway through last year. He claimed that neither he or GSK HQ in the UK knew anything about the corrupt practices occurring in their China branch.

So news today that has implicated a British employee who has been charged with corporate bribery, bribing non-government officials and bribing business units should force some kind of statement from Witty. Alas, he remains tight-lipped.

Are we expected to believe that Mark Reilly, upon his initial return to the UK in July 2013, lied to Andrew Witty?

10 days into the investigation and GSK’s head of operations in China, who at this point fled the country, is replaced by someone else. Who smelled the rat, or was this just standard procedure when an employee from GSK is under investigation?

Reilly has enjoyed an illustrious career at GSK. He joined them in 1989, 5 years later, in 1994, he became Finance Director, Discovery Research, WWR&D before moving on to become Assistant Corporate Controller, Corporate Finance, a position that lasted 2 years.

In 1999 he became Vice President Finance UK Pharmaceuticals, this lasted for just over 4 years before he decided to try his hand abroad.

From 2003 to 2006 Reilly was based in Singapore, his title, Vice President Finance, Asia Pacific.

He returned to the UK to take up the position of Senior Vice President, International Finance – this lasted just 2 years before Reilly was, once again, jet-setting.

Between January 2009 – January 2010 he was General Manager, China Pharmaceuticals. In February 2010 he added Hong Kong to his title – thus becoming General Manager, China Pharmaceuticals and HK.

So, where exactly did it go wrong for Reilly?

Was he just a bad egg in a company who have always played things by the book?

Was he the runt of the litter?

Was he just a rogue employee who went off the rails because of a personal greed?

Or is this simply a culture at GSK?

It was early in his career at GSK, 1994, that Reilly was introduced into the world of finance. From that point Reilly seems to have made a very rapid climb up the promotional ladder at GSK.

Reilly has a BSc, Medical Sciences, he has a PhD, Pharmacology/Neurosciences – strangely, between 1987 – 1989 he added an ACA in Business, Finance and Accounting to his list of honours. The ACA qualification is one of the most advanced learning and professional development programmes available.

Safe to assume then that Reilly was no mug.

We can see from a 2010 presentation given by Reilly that a goal of GSK was to gain more sales of its respiratory drugs in China.

In fact page 12 of his presentation pretty much spells it out for us all. [Fig 1]

“Respiratory market is a major opportunity”

Fig 1
 
Let’s look at when news of the Chinese scandal first broke.

According to interviews published by Xinhua, the official state-run news agency, several GSK employees have confessed to bribing doctors with gifts, travel, lecture fees and cash bonuses to persuade them to prescribe more of the company’s drugs.

A man surnamed Li, who is a regional sales manager at GSK China in central China’s Henan Province, said that salespersons at the company received special training on sales skills and methods, especially how to maintain relations with hospitals and doctors, Xinhua reports.

The man, who is in charge of selling respiratory drugs to more than 10 hospitals in the province’s capital city Zhengzhou, added that salespersons established good personal relations with doctors by catering to their pleasures or offering them money, in order to make them prescribe more drugs. [Source]

 “Respiratory market is a major opportunity”

A doctor from a “reputable hospital” whose real name was not given, claimed that one GSK representative had “blatantly offered kickbacks to doctors”.

“For example, 20 yuan [£2.11] for each pack of Seretide, an asthma-treating inhaler; and 10 yuan [£1.05] for each dose of Flixotide, an asthma-treating spray.”

If a doctor appeared reluctant to accept cash, GSK “salespeople” would offer them “gifts, free travel after meetings and lecture fees.”

“In fact, many doctors received lecture fees even when the lectures did not exist,” Xinhua reported. [Source]

Seretide is a drug manufactured and marketed by GSK, a drug used in the treatment of…you’ve guessed it, respiratory problems. It’s also the same drug that Reilly referred to in his 2010 presentation [Fig 1]

“Less than 1m current patients on Seretide”

What better way to increase the number of patients on Seretide than to offer cash incentives to doctor’s who prescribe it!

Putting the Chinese scandal aside for just one moment. Let’s just focus on a BBC Panorama programme that aired a few weeks ago in the UK.

Panorama’s ‘Who’s paying your doctor?‘ saw investigative journalist Shelley Jofre unearth new evidence that Glaxo were pretty much doing the same thing in Poland.

Jarek Wisniewiski, who worked as a sales rep for GSK Poland for eight years told Panorama that in 2010, he worked on a marketing programme across Poland to promoteSeretide. He said that, on paper, money was provided for educating patients about the drug but claims it was, in reality, paying doctors to prescribe more of the medicine. He added…

“I pay for education and in the same meeting I said that I need more prescriptions for Seretide. So … they knew exactly for what I pay.” [Source]

So, how did we get from one illegal promotional push of Seretide in China to another illegal promotional push of Seretide in Poland. The two countries are miles apart.

Was an executive decision made that “We should do as the Chinese do” or was it merely a coincidence that GSK Poland was operating in pretty much the same way as GSK China?

One drug pushed illegally in two different countries and Glaxo’s CEO knew nothing about it?

Back in July 2013 a Glaxo spokesperson claimed that…

“We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures. We have done this in China and found no evidence of bribery or corruption of doctors or government officials.” [Source]

Exactly who is it at GSK that monitor its businesses to ensure they meet their strict compliance procedures?

Why hasn’t this person/persons been hauled over the coals for failing to join the dots with regard to the bribery that was, seemingly rife, in China?

Thing is, and this has been evident throughout the years with GlaxoSmithKline, they are a company – any wrong-doing by an employee is covered up and it’s left to outside investigators to try and find the culprit, the man/woman who ‘pushed the button’, so to speak.

It’s only when the outside investigation pinpoints the ring leaders that we have Glaxo come out and say how shocked they are and that they will do everything in their power to help the investigation.

This is when GSK become transparent, they do so not of their own freewill, they do so because their hand has been forced by the strong arm of the law. However, they do it in such a way that dupes the general public into believing that they have always been as transparent as ever.

Think about it. If GSK were transparent they wouldn’t have had so many lawsuits filed against them. Lawsuits are only filed because GSK initially deny charges brought against them. In law, GSK don’t want to have to admit to anything because it sets a precedence – this is why we see them time and time again settle cases brought against them out of court – when a case is settled they get those who brought the claims against them to sign confidentiality agreements – in essence these agreements state that GSK accept no liability of the charges made against them.

China is a different kettle of fish though. Legal experts are suggesting that GSK’s Mark Reilly could face up to 10 years in prison. Let’s hope it’s not Beijing’s Municipal Prison.

Troy Bremer, an Australian found guilty of fraud, spent a number of years at Beijing’s Municipal Prison. “The officers destroy your body, mind, heart and spirit”, he told theSydney Herald in an exclusive interview back in 2013.

Heaven forbid that Reilly gets sentenced to 10 years in a hell hole such as Beijing’s Municipal Prison. Whatever he’s done it does not warrant such abuse.

Hopefully Reilly will see sense and try to cut a deal. The most obvious ‘Get out of jail card’ he could play would be to name names, to tell the authorities he did what he did because he was told to by senior executives.

I mean, why protect the scum that has left him out to dry?

Bob Fiddaman