GSK Bribery Scandal
2014-07-03 22:42:00 Source： Hit：
The Changsha Police (Hunan Province) have closed their file in the investigation on
GlaxoSmithKline (China) (GSKCI). GSKCI shall now face multiple business bribery charges.
Police investigations reveal that Ma, the former prescription department manager had, under instructions, paid a number of bribes to hospitals, medical practitioners, medical institutes and medical-related associations in order to boost prescriptions. According to news reports, GSKCI funded the bribery by imposing the cost on the medicine and ultimately on the public at large, making them as much as seven times as expensive as other countries. Chinese authorities now have seemed to target beyond “just a handful of Chinese-born employees” to include “foreign-born executives from multinational companies” (Barboza & Thomas).
China’s health-care sector is particularly vulnerable to corporate malpractice and business bribery. Although China’s spending on healthcare is projected to reach $1 trillion in 2020, Chinese hospitals tend to and had long relied on prescription sales as a source of revenue. Moreover, doctors who are often underpaid secretly take rebates by prescribing excessive or over-expensive drugs. The proliferation of bribery in the health sector has been brought to the attention of the Chinese government and authorities in recent years, which can be seen in the increased scrutiny and tightened regulations concerning the marketing practices of foreign companies. Having said so, it may not be an easy task for multinational companies to navigate the Chinese legal landscape and government without seeking professional assistance.
It is really a rare case where foreign executives and multinational companies are prosecuted in China. Beshining shall keep you updated of any new developments.
GlaxoSmithKline (China) (GSKCI). GSKCI shall now face multiple business bribery charges.
Police investigations reveal that Ma, the former prescription department manager had, under instructions, paid a number of bribes to hospitals, medical practitioners, medical institutes and medical-related associations in order to boost prescriptions. According to news reports, GSKCI funded the bribery by imposing the cost on the medicine and ultimately on the public at large, making them as much as seven times as expensive as other countries. Chinese authorities now have seemed to target beyond “just a handful of Chinese-born employees” to include “foreign-born executives from multinational companies” (Barboza & Thomas).
China’s health-care sector is particularly vulnerable to corporate malpractice and business bribery. Although China’s spending on healthcare is projected to reach $1 trillion in 2020, Chinese hospitals tend to and had long relied on prescription sales as a source of revenue. Moreover, doctors who are often underpaid secretly take rebates by prescribing excessive or over-expensive drugs. The proliferation of bribery in the health sector has been brought to the attention of the Chinese government and authorities in recent years, which can be seen in the increased scrutiny and tightened regulations concerning the marketing practices of foreign companies. Having said so, it may not be an easy task for multinational companies to navigate the Chinese legal landscape and government without seeking professional assistance.
It is really a rare case where foreign executives and multinational companies are prosecuted in China. Beshining shall keep you updated of any new developments.
