Updated on 5 September 2013
The GSK China Scandal has everything – sex, money, medicines and an elaborate investigation in what is said to be a country with the world’s most stringent laws
What started early in February this year, as a seemingly small scale price check by the Chinese regulator into the functioning of the drug makers operating in the country, soon turned into a grand scandal, with skeletons tumbling out of GlaxoSmithKline's closet one after the other. As the world held its breath tracking the development of this scandal all through last month, the magnitude of the revelations, albeit shocking in nature, did not bring GSK's oriental dreams crashing down entirely.
Early in February this year, the Chinese regulatory authorities started probing the pricing practices followed by the drug makers operating in the country. Alongside, an email by an anonymous whistleblower revealed that sales executives working with the British drug maker in China were involved in bribing Chinese doctors with extravagant gifts in return for prescribing GlaxoSmithKline drugs to their patients. The company immediately launched an internal inquiry into the allegations made by the whistleblower and soon announced in a statement that post ‘through investigations' it found ‘no cases of bribery in the company's China operations.'
So much so, that the company said in their statement, "GSK wants to reiterate to its patients, staff and partners in China that these allegations are false."
However, all was not well at GSK's China office, as revealed by a raid into the company's office by the Changsha police in China. It was then rumored that the company is being investigated for ‘economic crimes'. The rumors turned into reality, as less than a week after the raids, the Ministry of Public Security in China made its first detailed public disclosure of allegations against senior executives of GlaxoSmithKline who had been placed under criminal investigation for suspected bribery and tax violations. The police had then said that they found evidence that GSK falsified invoices used by travel agencies to bribe government officials, medical associations, hospitals and doctors in China.
The company continuously maintained that they were not aware of any details of the investigations. "The company is unclear about the precise nature or purpose of the investigation. There is nothing further to add to that," Mr Simon Steel, a GSK spokesperson told the media in London on July 5.