GlaxoSmithKline Faces Fresh Claims, Details Of An Internal Email Sent To Higher Ups Revealed
August 12, 2014
By Mark Terry, BioSpace.com Breaking News Staff
A new set of allegations of corruption have struck UK-based pharmaceutical company GlaxoSmithKline . This time an anonymous email was sent to the company’s top managers, including CEO Sir Andrew Witty and Judy Lewent, chair of GSK’s audit committee. The email alleged that company representatives had bribed Syrian doctors and country officials to boost sales of drugs, including cancer treatments and blood thinners.
GSK has been defending itself from a series of similar corruption claims in China, Iraq, Lebanon and Poland. The China allegations are the most dramatic, with GSK allegedly spending hundreds of millions of dollars on doctors and officials. In addition, the release of a covert sex tape of GSK’s top official in China, Mark Reilly, and his girlfriend, was released around allegations of bribery. The Chinese government is accusing GSK officials of bribing doctors through travel agencies, spending up to £280 million.
In comparison, the corruption charges in Syria are quite small. The email provided examples of a Syrian physician receiving $200 and $300 worth of free samples in exchange for ordering GSK drugs for his hospital instead of rival pharmaceuticals’ products. GSK’s Syrian operation has sales of less than $10 million annually.
Due to the civil war in Syria, GSK ceased its consumer operations there in 2012. However, its pharmaceuticals operations stayed in business.
GSK is being investigated by the U.S. Department of Justice for possible violations of the Foreign Corrupt Practices Act (FCPA). In the U.K., Britain’s Serious Fraud Office has also launched a criminal investigation.
The numerous allegations of corruption may be having an effect on the company’s bottom line. Profits dropped by 14% in the second quarter, and shares fell almost 5% to £14.81, the biggest drop on the FTSE 100 index. The root causes appear to be competition from generic drugs and the exchange rate, with a strong pound.
Pending internal and external investigations in Syria, GSK has suspended its relationship with their distributors in that country.
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