Healthy Skepticism Library item: 20575
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Publication type: Broadcast
Fern Tay H
Chinese police accuse GlaxoSmithKline of artificially inflating cost of medicine
PM : ABC Radio National 2013 July 180
http://www.abc.net.au/pm/content/2013/s3806244.htm
Full text:
MARK COLVIN: Chinese authorities have banned the head of finance of one of world’s biggest pharmaceutical companies, GlaxoSmithKline, from leaving the country.
Chinese police accuse GSK of bribing officials and hospital staff to boost sales and raise the price of medicine in China.
Huey Fern Tay reports from Beijing.
HUEY FERN TAY: One of the four senior Chinese executives from pharmaceutical giant GlaxoSmithKline confessed on state television this week how they had used local travel agencies as conduits to bribe doctors, officials, medical organisations and hospitals.
They have been detained but not charged.
The head of finance of GSK’s China division has also been banned from leaving the country since the end of June.
Shen Dayang is a spokesman for the Chinese Commerce Ministry.
SHEN DAYANG (translated): China stands firmly against commercial bribery in every way. Enterprises, no matter foreign or domestic, shall be punished by Chinese laws and bear legal liabilities if they violate them.
HUEY FERN TAY: Britain’s largest pharmaceutical company is alleged to have transferred as much as three billion renminbi or around $480 million US to more than 700 travel agencies and companies since 2007.
A staff member at one of the accused travel agencies in Shanghai said it was business as usual for them. He declined to comment any further.
TRAVEL SERVICE STAFF MEMBER (translated): We don’t want to be interviewed and we have nothing to say if you ask us. Secondly, what you know is exactly what we’ve heard from television. We have the same information as you do. I have nothing else to say.
HUEY FERN TAY: GlaxoSmithKline is conducting its own investigation into the matter, which it describes as “shameful”. It’s also hiring auditors Ernst and Young to review its operations in China.
Zhuo Xiaoqin is a lawyer and legal commentator on the Chinese healthcare industry. He says Chinese healthcare professionals and pharmaceutical companies have been caught up in corporate bribery scandals before. He says deep changes to the sector are needed.
ZHUO XIAOGIN (translated): There are tens of thousands of drug manufacturers in the country. There are so many companies who want to sell their products. This has created very vicious competition.
HUEY FERN TAY: China’s Ministry of Public Security has indicated they are investigating activities by other multinational pharmaceutical companies in China.
The crackdown comes amidst a national anti-corruption drive that’s been focused on government ranks so far.
This is Huey Fern Tay in Beijing for PM.
