Report: China rounds up GlaxoSmithKline staffers in corruption probe

Hard on the heels of a scandal that forced GlaxoSmithKline ($GSK) to fire its R&D chief in Shanghai, news reports are streaming out of China indicating that the police have been rounding up senior staffers of the multinational pharma company in a corruption probe.

Glaxo staffers in Shanghai, Beijing and Changsha were detained by police investigating "data fraud and bribery," according to a report from the South China Morning Post over the weekend. And a source told the newspaper that this wasn't the first time that the company had been investigated for bribery.

Then the state media earlier today picked up a statement from the police saying that senior executives were being investigated for "economic crimes," a term they commonly use to describe corruption. And the AFP reported that industry sources indicated that pharma companies routinely paid hospitals and physicians bribes to ensure use of their products.

Just a few weeks ago GlaxoSmithKline fired its China R&D chief, Jingwu Zang, after claiming he had submitted a paper that included fake data. Three other staffers were put on leave and another employee left the company. At about the same time the pharma giant claimed that it had conducted a four-month investigation and found no instances of bribery by its sales staff.

The bribery investigation followed reports covering claims that GlaxoSmithKline had been handing out cash to its sales staff to bribe physicians at hospitals to use their drugs. Glaxo responded by saying that the company does pay doctors to attend events or reimburse expenses, but that none of those activities are illegal.

Like many other Big Pharma companies, GlaxoSmithKline has been investing heavily in China, anxious to take advantage of its growing R&D expertise while tapping into one of the world's top emerging markets. The allegations and investigations come at a time GlaxoSmithKline has been trying to shed a reputation for shady behavior--which has cost the company some heavy fines.

"We are aware of an ongoing investigation by the Chinese government authorities (PSB) into GSK's business in China," GSK said in a statement to FierceBiotech. "At this stage, it is unclear from the PSB what the precise nature of the investigation is. We will of course co-operate fully with the inquiry. All of our offices in China remain open and staff are turning up for work normally."

- here's the story from the South China Morning Post
- here's the story from the AFP

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