New bribery allegations hit GSK in China - WSJ

SHANGHAI, July 8 Sun Jul 7, 2013 11:37pm EDT

SHANGHAI, July 8 (Reuters) - China-based staff of GlaxoSmithKline Plc allegedly handed doctors with cash and other rewards for prescribing Botox, according to the Wall Street Journal, in the latest scandal to hit the British drugmaker which is under investigation by Chinese police for economic crimes.

Internal documents and email showed GSK's China sales staff were also apparently instructed to use their personal email addresses to discuss marketing strategies related to Botox, the report added.

Citing an internal email dated May 13, a whistleblower notified GSK's board of directors and compliance officers of the allegations that its China sales staff bribed doctors to prescribe Botox over the past year, the paper reported on Sunday.

The same anonymous whistleblower earlier made allegations that GSK sales representatives in China were involved in widespread bribery to get doctors to prescribe the company's medicines, the report added.

GSK officials could not be immediately reached for comment when contacted by Reuters.

The Wall Street Journal quoted a company spokesman as saying: "We believe they come from the same source who has made previous claims of alleged corruption and bribery in our China business."

"After a thorough investigation, we found no evidence to support these allegations. Nevertheless, we are investigating these new claims. However, our inquiries to date have found no evidence of bribery or corruption in relation to our sales and marketing of therapeutic Botox in China."

The allegations come as police in the south-central Chinese city of Changsha investigate high-level Chinese staff at the firm on suspicion of economic crimes. It is not clear if the Changsha investigation is related to any of the allegations.

Changsha police have not provided any further details about the investigation and a GSK spokesman in London has said it is unclear what the investigation is about.

GSK. Merck and other foreign and domestic drugmakers are also being investigated by China's top economic planning agency on cost and pricing issues, as foreign firms come under pressure from Beijing over possible price-fixing.

China is an increasingly important market for international pharmaceutical companies, which are relying on growth in emerging markets to offset slower sales in Western markets where many former blockbuster drugs have lost patent protection.

IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second-biggest drugs market behind the United States by 2016.

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