GSK in ‘constructive’ talks over graft scandal

British drugs firm GlaxoSmithKline (GSK) said Monday that it has "zero tolerance" for the illegal acts perpetrated by some senior executives of its China branch after meeting with Chinese law enforcement authorities.

Abbas Hussain, GSK's President International - Europe, Japan, Emerging Markets and Asia Pacific, met with officials from the Ministry of Public Security last week to discuss the serious breaches in Chinese law allegedly perpetrated by senior Chinese GSK staff, said Fang Fang, a press officer from GSK China.

"We have had a very constructive meeting with the Ministry of Public Security, and we are very grateful for their time. GSK is taking this situation extremely seriously and that is why we are here," Hussain said, according to a statement sent to the Global Times.

"Certain senior executives of GSK China who know our systems well, appear to have acted outside of our processes and controls which breaches Chinese law. Savings made as a result of proposed changes to our operational model will be passed on in the form of price reductions, ensuring our medicines are more affordable to Chinese patients," Hussain said.

According to a statement from the Ministry of Public Security Monday, a ministry official had met senior representatives from GSK's head office in Beijing. Some senior GSK China executives colluded with affiliated companies to offer large bribes to push up drug prices, lift sales and seek illegal profits.

Their suspected crimes have not only violated Chinese laws, but also seriously disturbed market order and harmed patients' interests, said the official.

The meeting came after the ministry announced on July 11 that 20 people, including four senior executives from GSK China, are being investigated for suspected bribery and tax-related violations. GSK transferred up to 3 billion yuan ($488 million) to 700 travel agencies and consultancies over six years.

Chinese authorities are also widening their probe into other foreign drug makers in the wake of the GSK scandal.

A spokeswoman for UK pharmaceutical company AstraZeneca said Monday officials from the Shanghai public security bureau visited its Shanghai office Friday and one sales representative was taken away for questioning.

The Shanghai office of the Belgium-based global biopharma company UCB was also visited by the State Administration of Industry and Commerce, China Business News reported Monday.

The newspaper said medical sales representatives from several companies were ordered to empty their e-mail boxes and bring no material when paying regular visits to doctors. Several academic conferences have been canceled, as doctors are currently unwilling to attend.

However, other multinational pharmaceuticals including Roche, Novartis and Abbott denied that their branches had seen random checks by authorities.

UCB had no response to questions posed by the Global Times Monday.