UK drug giant GlaxoSmithKline has been ordered to pay £297 million to the Chinese government after having been found guilty of bribing doctors to prescribe its medicines.
The judge also reportedly handed Mark Reilly, the firm’s former chief of Chinese operations, a suspended three-year prison sentence and ordered his deportation from the country.
GSK said it fully accepts the verdict of the Chinese judicial authorities, and sincerely apologised to the Chinese patients, doctors and hospitals, and to the Chinese Government and the Chinese people, noting that it “deeply regrets the damage caused”.
Sir Andrew Witty, GSK's chief executive, said: "Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK. We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country and its people.”
Sir Andrew went on to say that “we will continue to expand access to innovative medicines and vaccines to improve their health and well-being. We will also continue to invest directly in the country to support the government's health care reform agenda and long-term plans for economic growth."
The fine will be paid with existing cash resources, while associated costs and charges related to restructuring will be included in GSK’s third quarter update, it said.
The drug giant’s marketing activities have also recently been under investigation in Poland, for allegedly bribing doctors to promote its asthma blockbuster Seretide, and in Syria, where doctors were bribed with cash, trips and free samples to help boost cancer and blood-clotting sales.
The settlement is good news for GSK given the intense spotlight it has been under over its China activities. However, it could face further action in the USA and the UK from fraud authorities that are looking into the company’s operations overseas.