More arrests, confessions reported in China pharma scandal
Saturday, July 27, 2013 at 6:08AM
Richard L. Cassin in China, Doctors, Glaxo, Liang Hong, travel and entertainment expenses

China state media reported Friday that police have detained 18 more people in the growing bribery investigation of U.K. drug maker GlaxoSmithKline.

Those detained include company employees and medical personnel, according to a report by the Guardian.

China had already arrested four senior executives of GlaxoSmithKline. They were reported to be Chinese nationals.

The company is suspected of paying $489 million in bribes to doctors and medical officials, using more than 700 travel agents as go-betweens.

The Guardian Friday said the Xinhua news agency carried details of an interview 'with a regional sales manager for GSK responsible for selling respiratory drugs to more than 10 hospitals.

The man, surnamed Li, said about Glaxo:

They invited doctors to join high-end academic conferences to help the practitioners increase influence in their fields. They also established good personal relations with doctors by catering to their pleasures or offering them money, in order to make them prescribe more drugs

Last week, 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.

Xinhua also reported Friday that 'A 35-year-old female medical representative surnamed Wang, working under Li, said she entered doctors' offices to act as their assistant, and meet their needs as much as possible, even their sexual desires.'

The woman said the company's China executives knew about the scheme and 'some executives gave clear directives to the sales department to offer bribes to doctors with money or opportunities to attend academic conferences.'


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

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