CHINA FINES GLAXOSMITHKLINE $492 MILLION FOR BRIBERY
Friday, September 19, 2014
Drug maker GlaxoSmithKline was fined $492 million on Friday for bribing doctors in China in the biggest such penalty ever imposed by a Chinese court. The company's British former country manager was sentenced to prison.
Prison terms for the former manager, Mark Reilly, and four Chinese co-defendants were postponed by a court for two to four years, suggesting they may never be served. The court said it granted leniency because the defendants confessed.
The case, first publicized in mid-2013, highlighted the widespread use of payments to doctors and hospitals by sellers of drugs and medical equipment in a poorly funded health system that Chinese leaders have promised to improve.
In a statement, Glaxo said it would pay the fine and had made changes in its business to remedy flaws cited by Chinese authorities. It said it would change the incentive system for employees and reduce its engagement with health professionals.
"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," said CEO Sir Andrew Witty in the statement.
Reilly was sentenced by the court in the central city of Changsha to three years prison with a four-year reprieve and was ordered deported, which meant he might leave China immediately. His co-defendants received prison terms of two to four years, with reprieves of two to four years.
In other cases, convicts have been spared prison if they are deemed to have reformed during their reprieve.
The police ministry said in May that Reilly was accused of operating a "massive bribery network." It said Reilly ordered salespeople beginning in January 2009 to pay doctors, hospital officials and health institutions to use GSK's products.
Authorities said that resulted in several billion yuan (hundreds of millions of dollars) in "illegal revenue."