Glaxo to reform China business, executive tells government

SHANGHAI, July 22 Mon Jul 22, 2013 12:25am EDT

SHANGHAI, July 22 (Reuters) - A senior executive from GlaxoSmithKline told Chinese police the British drugmaker will reform its business in the country in the wake of a bribery scandal, China's Ministry of Public Security said on Monday.

It said GSK's president for emerging markets, Abbas Hussain, made the pledge in a meeting with ministry officials. Britain's biggest drugmaker has sent Hussain to China to deal with the scandal.

"Hussain apologised on behalf of GSK and said GSK will fully support the Chinese government's resolution to root out corruption and will actively reform GSK's original business and operating procedures in China," the ministry said in a statement.

Police last week accused GSK of bribing officials and doctors to boost sales and raise the price of its medicines in China. They said GSK transferred up to 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate the bribes.

GSK said it was deeply concerned by the allegations, which it called "shameful".

The ministry, which urged GSK to take "responsibility" for the scandal, cited a statement from GSK as saying four detained Chinese executives from the drugmaker were able to break the law because they knew the company's internal systems so well.

GSK officials were not immediately available to comment on the ministry statement. It was unclear if the statement the ministry cited was one GSK had released or was just made available to police.

Hussain was dispatched to China by Chief Executive Andrew Witty, along with the group's global head of internal audit and a senior legal official, a person familiar with the matter said on Friday.