GlaxoSmithKline Embroiled In Bribery Scandal In China

GlaxoSmithKline officials have admitted that some of the pharmaceutical company's top executives in China may have violated Chinese laws. Beijing has accused the company of engaging in a wide-ranging bribery scheme to boost sales and profits in the country. The company said it is cooperating with the investigation.

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MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel. Britain's largest drug maker GlaxoSmithKline said today that some of its senior executives may have broken the law in China. The company faces allegations that it bribed Chinese doctors and hospitals to buy its drugs. NPR's Jim Zarroli has the story.

JIM ZARROLI, BYLINE: Glaxo said in a statement that some of its senior executives who knew its systems well appear to have acted outside of its processes and controls and that such conduct would breach Chinese law. The statement is the first acknowledgement that there may be evidence to support allegations of bribery by the company.

Chinese officials have accused Glaxo of using a network of travel agencies and consultancies to funnel nearly $500 million to health care officials. This isn't the first time that a major pharmaceutical company has been accused of corruption in China. Over the past year, the U.S. companies Pfizer and Eli Lilly have been accused of paying bribes in China.

But Mike Koehler, assistant professor of law at Southern Illinois University, says the charges have usually been leveled by outside governments such as the United States.

MIKE KOEHLER: What makes this situation potentially unique is it's the Chinese government now investigating this conduct, not the U.S. government.

ZARROLI: The investigation appears to reflect a concern among China's new leaders about widespread corruption in the health care field and it's not likely to stop with Glaxo. Today, AstraZeneca said officials of the Public Security Bureau in Shanghai had visited the company's offices last week and took an employee in for questioning. The investigation comes at a time when big drug companies are under growing pressure by the Chinese government to cut their prices.

Glaxo said today that company officials had met with investigators and would take a new look at the company's business model. It also said it would pass on any savings it achieves to Chinese customers. Jim Zarroli, NPR News.

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