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Richard L. Cassin Publisher and Editor

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Thomas Fox Contributing Editor

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Bill Waite Contributing Editor

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FCPA Blog Daily News

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Tuesday
Apr082014

GSK probes Iraq sales

British pharma GlaxoSmithKline said it is investigating allegations the company hired government-employed doctors and pharmacists in Iraq as paid sales reps for its products.

"We are investigating allegations of improper conduct in our Iraq business. We have zero tolerance for unethical or illegal behavior," a company spokesman told Reuters.

GSK said it employs fewer than 60 people in its drug-sales operation in Iraq.

In July, China accused GSK of paying more than $480 million to state-employed doctors and health officials to prescribe or use its medicines.

China detained four GSK employees, all Chinese nationals.

The Ministry of Public Security said GSK used 700 travel agencies to pay the alleged bribes since 2007.

China state TV broadcast a confession by GlaxoSmithKline's vice president of China operations, Liang Hong. He admitted paying off doctors, saying the bribe amounts -- up to thirty percent of the cost of the drugs -- were passed along to consumers.

The Iraq allegations were first reported by the Wall Street Journal. The paper said emails from a person familiar with GSK's Middle East operations described alleged corrupt practices in Iraq up to 2013.

One of the emails said the sales practices appeared to violate both the FCPA and the UK Bribery Act.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.