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.”
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.