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British national Peter Humphrey and his wife Yu Ying Zeng, an American national, have been charged with illegally obtaining private information in GSK China bribery case, Xinhua news agency said.
Peter Humphrey and Yu Ying Zeng were arrested in China in August 2013.
His company, ChinaWhys, was hired by GlaxoSmithKline China, which is embroiled in controversy over alleged systematic bribery of Chinese doctors.
Prosecutors say the couple “illegally trafficked a huge amount of personal information on Chinese citizens” for profit, Xinhua reported.
They obtained this information by “secret photography, infiltration or tailing after someone”, it said.
Peter Humphrey has been charged with illegally obtaining private information in GSK China bribery case
“Based on the information, the couple compiled so-called <<reports>> and sold them at high prices to their clients, most of which are China-based multinational corporations, including GSK China,” it said.
Local courts “will hold [a] hearing about the case soon”, the agency added.
In a statement earlier this month, GSK said that its China operation hired ChinaWhys in April 2013 “to conduct an investigation following a serious breach of privacy and security related to the company’s China general manager”.
This is understood to relate to a s** tape said to have shown the general manager, Mark Reilly, who said the footage was filmed without his knowledge or consent.
The video was sent to GSK’s London-based CEO Andrew Witty with an email accusing Mark Reilly of being behind systematic corruption in the company’s China operation.
Mark Reilly is currently being investigated by Chinese authorities, as are at least two other senior GSK China executives. He is alleged to have pressed his sales team to bribe doctors, hospital officials and health institutions to increase sales of GSK products.
He is currently effectively detained in China, and has made no recent comment.
GSK has described the allegations as “deeply concerning”.
“We are learning lessons from this situation and we are determined to take all actions necessary as a result,” it said in the statement.
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Allegations that GSK systematically bribed doctors in China are credible, says Peter Humphrey, an investigator hired by the pharmaceutical giant.
Peter Humphrey was hired only to investigate who was behind a suspected smear campaign against GSK.
After he finished his report, the investigator learned the details of further allegations against the company and told colleagues he believed they were true.
The allegations against GSK’s China operation first emerged in an email in January 2013 from an anonymous and self-styled whistleblower to the company.
The email alleges that GSK’s sales teams targeted influential doctors with expensive gifts and cash to win business.
Four senior executives and the former head of GSK China have been detained by Chinese police
It also alleges that some doctors were sent on all expenses-paid holidays masquerading as conferences. The payments were funneled as fictional expenses through a travel agent.
Peter Humphrey’s company, ChinaWhys, was hired to try to indentify who the anonymous whistleblower was. GSK China suspected a former senior staff member, Vivian Shi Wen, who was dismissed at the end of 2012.
Vivian Shi Wen has previously denied being the GSK whistleblower.
Since the case came to light, four senior GSK executives have been detained by Chinese police and the former head of GSK China, Mark Reilly, is also effectively detained. Peter Humphrey will stand trial later this year for illegally buying and selling private information.
What is notable about the documents is not just the scale of the allegations against the company, but also the detail within them. The whistleblower’s email alleges that the company’s aggressive marketing strategies “constitute bribery in the vast majority of cases”. It further alleges:
- GSK falsified its records to conceal illegal practices including bribery and promoting the use of drugs for not yet approved purposes
- The practice of giving cash to doctors to sell products was common
- GSK fabricated an internal “compliance” scheme which effectively covered up widespread corruption
- GSK failed to investigate its entire sales team
The email names specific doctors and hospitals and also quotes individual GSK executives and their private email accounts.
GSK said in a statement that its own investigation had not found evidence to back the claims in the email.
“Our China business is now subject to an ongoing investigation by the Chinese authorities with which we are fully cooperating. We have also hired an external law firm, Ropes and Gray, to conduct an independent review into what happened in our China business during this period,” the statement said.
Bribery is widely believed to be endemic in China’s pharmaceutical sector, which has witnessed explosive growth in recent years.
While GSK has accepted that individual employees in China may have behaved inappropriately in China, it has consistently denied they acted on instructions of the company. If the company were found to be liable, it could face enormous fines from UK and US authorities who have fierce anti-bribery regulations.
GlaxoSmithKline (GSK) has agreed to a $105 million settlement with 44 US states and the District of Columbia over allegations it mispromoted three drugs.
The drugs are asthma medication Advair and anti-depressants Paxil and Wellbutrin.
GSK has agreed to a $105 million settlement with 44 US states and the District of Columbia over allegations it mispromoted three drugs (photo Alamy)
The pharmaceutical giant did not admit any wrongdoing, and said the charges came from past issues.
As part of the settlement, GSK must extend its Patient First Program until 2019, which prohibits financial incentives to its sales people, and it is prohibited from paying doctors to speak about GSK’s products or attend conferences.
“This settlement requires GSK to pay a significant penalty and imposes strong new rules designed to prevent future misrepresentations of GSK products,” said California attorney general Kamala Harris in a statement.
GSK insists that many of these practices are already in place.
British GSK executive Mark Reilly has been accused by the Chinese police of ordering staff to bribe hospital officials to use its medical products.
Mark Reilly and two other colleagues are also suspected of bribing government officials in Beijing and Shanghai, they said.
Police have handed the case over to prosecutors, officials said.
GlaxoSmithKline said it took the allegations “very seriously” and would co-operate with the authorities over the matter.
Mark Reilly is alleged to have pressed his sales team to pay doctors, hospital officials and health institutions to use GSK products
Chinese authorities announced in July last year that they were investigating GSK, detaining four Chinese GSK executives.
The police ministry accused Mark Reilly, the company’s former head of China operations, of personally running a “massive bribery network”.
He is alleged to have pressed his sales team to pay doctors, hospital officials and health institutions to use GSK products, resulting in the “illegal revenue” of hundreds of millions of dollars.
At a news conference, the investigators took pains to explain how the cost of the alleged bribes was passed directly on to Chinese consumers.
They said the cost of the drugs sold by GSK in China was much higher than that of similar drugs sold by the company in other countries – sometimes up to seven times higher.
The investigators also said that while the company itself had been “very responsible and has given us their full support”, the firm’s operation in China “tried to pay bribes” in order to “obstruct” their efforts “in exposing their bribery behaviors”.
Mark Reilly had briefly left China when the investigation was launched last July, but returned to help with the inquiry. A police investigator was believed to still be in China.
The Chinese operation of GSK was accused by the Chinese authorities, when the probe first began, of using travel agencies and consultancies to transfer bribes over several years.
GSK has already apologized for employees apparently acting outside of its internal controls, but denies the sums of money are anything like as high as those alleged to have been paid.
The pharmaceutical giant is also facing a criminal investigation into similar allegations in Poland.
Pharmaceutical giant GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors.
Eleven doctors and a GSK regional manager have been charged over alleged corruption between 2010 and 2012, BBC reported.
A former sales rep said doctors were paid to promote GSK’s asthma drug Seretide.
GSK said one employee had been disciplined and it was co-operating with investigations.
If the allegations are proved, GSK may have violated both the UK Bribery Act and the US Foreign Corrupt Practices Act. It is illegal for companies based in either country to bribe government employees abroad.
A former sales rep for GSK in the Polish region of Lodz, Jarek Wisniewski, said: “There is a simple equation.”
“We pay doctors, they give us prescriptions. We don’t pay doctors, we don’t see prescriptions for our drugs.
“We cannot go to doctors and say to them, <<I need 20 more prescriptions>>. So we prepare an agreement for them to give a talk to patients, we pay £100 [$150], but we expect more than 100 prescriptions for this drug,” he told BBC program, Panorama.
GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors (photo Reuters)
“It’s a bribe,” Jarek Wisniewski said, confirming that although on paper the payments were for educational services, the doctors understood very clearly that they must produce a certain number of prescriptions in return.
The Lodz public prosecutor found evidence in documents given to doctors by GSK to support claims of corrupt payments in more than a dozen different health centers where there was no evidence “patient education” had taken place.
Spokesman Krzysztof Kopania said: “We have evidence that in more than a dozen cases it was a camouflaged form of a bribe.
“In return for the financial gains the doctors would favor the product proposed by the pharmaceutical company and they prescribed that medicine.”
One doctor has already admitted guilt, been fined and given a suspended sentence. He said he accepted £100 for a single lecture he never gave, but only under pressure from a GSK drugs rep.
The company said a GSK training program to help improve diagnostic standards and medical training in respiratory disease was run by doctors in Poland from 2010 to 2012.
A statement said: “These sessions were delivered by specialist healthcare professionals who, based on contracts signed with GSK, received payments appropriate to the scope of work as well as their level of knowledge and experience. The provision of sessions under this programme was agreed with the Polish healthcare centers.
“Following receipt of allegations regarding the conduct of the program in the Lodz region, GSK has investigated the matter, using resources from both inside and outside the company. The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result.
“We continue to investigate these matters and are co-operating fully with the CBA [Poland’s Central Anticorruption Office].”
In 2012, GSK paid $3 billion in the largest healthcare fraud settlement in US history after pleading guilty to promoting two drugs for unapproved uses and failing to report safety data about a diabetes drug to the Food and Drug Administration (FDA).
Last December, GSK announced it was making major changes to its incentive schemes after a damaging corruption scandal in China.
British pharmaceutical giant GlaxoSmithKline (GSK) will investigate allegations about its conduct in Iraq, nine months after an inquiry into the company began in China.
“We are investigating allegations of improper conduct in our Iraq business,” a GSK spokesman said.
“We have zero tolerance for unethical or illegal behavior.”
GSK will investigate allegations about its conduct in Iraq, nine months after an inquiry into the company began in China (photo Reuters)
GSK will investigate claims that it hired 16 state-employed doctors and pharmacists as paid sales representatives at a time they continued working for the government.
The allegations, which date back to 2012, were sent to the company late last year, the Wall Street Journal reported.
They allege that GSK paid for the doctors’ expenses to attend international conferences, and that it pays other doctors high fees to give lectures in exchange for promoting its drugs.
The emails were from someone familiar with the company’s Middle East business, said the report.
“In total, we employ fewer than 60 people in Iraq in our pharmaceuticals operation and these allegations relate to a small number of individuals in the country,” GSK said.
Last summer, GSK said senior executives in its China office appeared to have broken the law amid a bribery scandal.
The acknowledgement came as GlaxoSmithKline said it was co-operating with a Chinese investigation into alleged bribing of doctors to prescribe the company’s drugs.
Giant drug-maker GlaxoSmithKline is seeking regulatory approval for RTS,S, the world’s first malaria vaccine after trial data showed that it had cut the number of cases in African children.
Experts say that they are optimistic about the possibility of the world’s first vaccine after the trial results.
Malaria, a mosquito-borne parasitic disease, kills hundreds of thousands of people worldwide every year.
Scientists say an effective vaccine is key to attempts to eradicate it.
RTS,S (or Mosquirix ) was found to have almost halved the number of malaria cases in young children in the trial and to have reduced by about 25% the number of malaria cases in infants.
GSK is developing RTS,S with the non-profit Path Malaria Vaccine Initiative (MVI), supported by funding from the Bill & Melinda Gates Foundation.
“Many millions of malaria cases fill the wards of our hospitals,” said Halidou Tinto, a lead investigator on the RTS,S trial from Burkina Faso.
GSK is seeking regulatory approval for RTS,S, the world’s first malaria vaccine
“Progress is being made with bed nets and other measures, but we need more tools to battle this terrible disease.”
The malaria trial was Africa’s largest-ever clinical trial involving almost 15,500 children in seven countries.
The findings were presented at a medical meeting in Durban, South Africa.
“Based on these data, GSK now intends to submit, in 2014, a regulatory application to the European Medicines Agency [EMA],” GSK said in a statement.
GSK has been developing the vaccine for three decades.
The statement said that the hope now is that the Geneva-based World Health Organization (WHO) may recommend the use of the RTS,S vaccine from as early as 2015 if EMA drugs regulators back its licence application.
Testing showed that 18 months after vaccination, children aged five to 17 months had a 46% reduction in the risk of clinical malaria compared to unvaccinated contemporaries.
However, in infants aged six to 12 weeks at the time of vaccination, there was only a 27% reduction in risk.
A spokeswoman for GSK told the AFP news agency that the company would file its application to the EMA under a process aimed at facilitating new drugs for poorer countries.
Malaria:
- Malaria remains the leading cause of illness and death around the globe
- Worldwide, a child dies of malaria every 30 seconds
- The parasitic disease, carried by mosquitoes, kills around 800,000 people a year
- 90% of all malaria cases are in sub-Saharan Africa
- Making malaria vaccine available for routine use will be a major hallmark
- The vaccine will only be part of the solution to tackling this preventable infection
- Bed nets, insect repellents, malaria drugs and targeted killing of mosquito breeding grounds are also key, say experts [youtube J6r9UIWGvW4]
Johnson & Johnson has become the latest foreign pharmaceutical company to be accused of misconduct in China.
A ruling by a Shanghai court ordered Johnson & Johnson to pay $85,000 to a local distributor for violating anti-monopoly laws.
Two subsidiaries of the company were accused of setting a minimum price for the sale of surgical instruments.
Multinationals have faced increased scrutiny from the Chinese authorities.
Last month, two foreign milk suppliers announced price cuts after the government launched an investigation into possible price-fixing.
Johnson & Johnson has become the latest foreign pharmaceutical company to be accused of misconduct in China
Four Chinese executives from the pharmaceutical giant GlaxoSmithKline have also been detained after being accused of paying bribes.
The Chinese authorities are sensitive to consumer prices as the cost of living continues to surge.
Some business analysts say that foreign companies are being targeted to shore up the market share for their Chinese competitors.
The Shanghai court overturned a judgment by a lower court that cleared the Johnson & Johnson subsidiaries.
The judge said the ruling was intended to protect consumers and the public interest.
He said the $85,000 damages were intended to compensate the distributor, Rainbow Medical, for lost sales.
It was denied access to further products by the suppliers after being told it was selling medical equipment too cheaply.
Rainbow Medical brought the case to court with a demand for $2.2 million compensation.
It expressed disappointment at the size of the award.
British pharmaceutical giant GlaxoSmithKline (GSK) made “illegal” transfers, say Chinese police as they released details of an investigation into bribery allegations.
Four senior Chinese executives from GSK have been held, said Gao Feng, head of the economic crimes investigation unit.
Gao Feng said GSK had transferred as much as 3 billion yuan ($489 million) to travel agencies and consultancies since 2007.
Chinese police said GSK had transferred as much as $489 million to travel agencies and consultancies since 2007
GSK has said it has not found any evidence of corruption.
However, the company said in a statement last week that it was co-operating with authorities.
On July 11, the Ministry of Public Security said GSK executives had confessed to bribery and tax violations. Authorities said they suspect GSK of offering bribes to officials and doctors to try to boost sales in China.
On Monday, Gao Feng did not go into how much of the money was spent allegedly bribing officials and doctors.
He did, however, say that the probe had found that GSK was mainly responsible for the bribes which included cases of s**ual bribery.
“We have sufficient reason to suspect that these transfers were conducted illegally,” Gao Feng said.
“You could say the travel agencies and GSK were criminal partners.”
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Chinese authorities have announced that some senior executives of the local division of GlaxoSmithKline (GSK) are facing a criminal investigation.
They are being investigated for bribery and tax-related violations, said the Chinese Ministry of Public Security.
They are suspected of offering bribes to officials and doctors in an attempt to boost sales in the country.
GSK said in response to the allegations that it had found no evidence of bribery or corruption in China.
“We are willing to co-operate with the authorities in this inquiry,” the company said in a statement, adding that it had only just received official word of the “specific nature” of the investigation.
“We take all allegations of bribery and corruption seriously,” the statement said.
GSK senior executives are being investigated in China for bribery and tax-related violations
“We continuously monitor our businesses to ensure they meet our strict compliance procedures – we have done this in China and found no evidence of bribery or corruption of doctors or government officials. However, if evidence of such activity is provided, we will act swiftly on it.”
The Chinese Ministry of Public Security said in a statement that police had questioned some of the suspects.
It accused the firm of bribing government officials and doctors, as well as overstating tax receipts.
“The case involves many people, the duration of time is long, the amount of money involved is huge and the criminal activities are malicious,” the ministry said.
Senior executives at GSK are already being investigated by Changsha public security officials for “economic crimes”, the city’s police force said last month. However, it is not clear if the Changsha investigation is related to any of the latest allegations.
Pharmaceutical giant GlaxoSmithKline (GSK) has been accused of market “abuse” by the consumer watchdog, the Office of Fair Trading (OFT).
The OFT alleges that the company paid rivals to delay the release their own versions of GSK’s antidepressant drug Seroxat (paroxetine).
Alpharma, Generics UK and Norton Healthcare all received money not to enter the market with their copies of Seroxat.
Seroxat is a drug used to treat depression.
Consumer watchdog Office of Fair Trading alleges that GSK paid rivals to delay the release their own versions of Seroxat drug
The generic drug makers were attempting to supply the UK market with their versions of paroxetine, which GlaxoSmithKline brands as Seroxat, the OFT said.
GSK accused them of infringing its patent, so to resolve this dispute the pharmaceutical company effectively paid the three companies off, according to the OFT.
If proven, the allegations would be an infringement on the part of all the parties of competition law and on the part of GSK an abuse of its dominant place in the market.
“The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS, to the benefit of patients and, ultimately, taxpayers,” said Ann Pope, senior director of services, infrastructure and public markets at the OFT.
“It is therefore particularly important that the OFT fully investigates concerns that independent generic entry may have been delayed in this case.”
The companies will now be asked to respond to its allegations, before the OFT makes a decision on whether or not competition law has been infringed.
