GSK case sounds alarm for foreign firms  

葛兰素史克行贿案背后潜规则：药越贵医院越欢迎

The latest development in the GlaxoSmithKline (GSK) China bribery saga is teaching foreign firms in China a fresh lesson on business integrity.

After more than 10 months of investigation, the case is complete and has been handed over to prosecutors, authorities said Wednesday.

Police found out that the British drugmaker offered bribes to boost sales and inflated drug prices to accommodate bribery expenses and high profits.

The probe not only revealed why some imported drugs in China are oddly expensive, but illustrated what will happen when a company chooses to focus solely on profits instead of business ethics and the benefit of consumers.

Drugs are more than just commodities. They epitomize the social responsibilities of manufacturers who work to cure diseases and relieve pain through research and development.

GSK's practices in China tainted both the company's reputation and its credibility worldwide. Mark Reilly, former head of GSK China, is believed to have pressed his sales teams to bribe hospitals, doctors, other medical institutions and organizations through various means, gaining billions of yuan in illegal revenue.

The company manipulated prices to disguise real costs. The actual cost of a box of Heptodin is 15.7 yuan (2.55 U.S. dollars). It is declared as 73 yuan at customs and priced at 142 yuan as factory price. In contrast, the drug sells at about 18 yuan in the Republic of Korea, 26 yuan in Canada and 30 yuan in the United Kingdom, according to a document acquired by Xinhua.

No matter how a company tries to disguise its practices, the truth will come out eventually.

Patients and the government had to foot the bill for these expensive drugs. The health of patients might also be at stake as some doctors had the incentive to prescribe excessive amounts to get more kickbacks.

GSK's practices eroded its corporate integrity and could cause irreparable damage to the company in China and elsewhere. The case is a warning to other multinationals in China that ethics matter. Increasingly attractive to foreign investors, more and more companies see China as their most important market.

These investors should learn to respect the Chinese market, at the very least by providing quality products at reasonable prices, abandoning discrimination and honoring their due social responsibilities.

For those profiteers, the market will eventually make its own choice.