GlaxoSmithKline faces criminal investigation from Britain’s SFO

Inquiry into commercial practices at company and subsidiaries adds to problems for UK drug giant in several markets

Tue, May 27, 2014, 21:19

Britain’s Serious Fraud Office has opened a criminal investigation into the commercial practices of US drug giant GlaxoSmithKline and its subsidiaries.

A spokesman for the company, Britain’s largest pharmaceuticals business, said: “GSK is committed to operating its business to the highest ethical standards and will continue to co-operate fully with the SFO.”

GSK has been at the centre of a slew of allegations in recent months from investigators in China, Iraq and Poland, after company reps were alleged to have paid doctors and hospital officials to prescribe its products ahead of others.

Earlier this month, Chinese police accused Mark Reilly, a senior executive, of pressing his sales team to bribe doctors, hospital officials and health institutions, allegedly resulting in “illegal revenue” of billions of yuan.

Mr Reilly and two Chinese executives were also accused of bribing government officials in Beijing and Shanghai.

GSK whistleblower Jarek Wisniewiski told the BBC’s Panorama programme last month that reps had paid doctors to boost prescriptions in Poland. Another former GSK drug rep, who did not want to be identified, said they paid doctors for lectures that never happened and this would result in a greater number of prescriptions.

Panorama reported that a criminal investigation was under way and that 11 doctors and one GSK regional manager had been charged in connection with corruption.

The company has also run into problems at its Irish business, announcing a major product recall last month after the US Food and Drug Administration published a warning letter over contamination at its Cork plant.

In the letter, dated March 18th, the FDA said GSK had not done enough to solve problems discovered at its Currabinny plant.

If the new allegations were successfully prosecuted, GSK may have violated both the UK’s Bribery Act and the US Foreign Corrupt Practices Act, the programme said. In both countries it is illegal for companies based there to bribe government employees abroad.

In confirming that a criminal investigaiton was underway, the Serious Fraud Office noted that whistleblowers were “valuable sources of information” to the SFO in its cases.

“We welcome approaches from anyone with inside information on all our cases including this one,” it said in a statement. – PA