GlaxoSmithKline's tussle with China is getting messier and riskier
The significance is that ? if proved ? it would be harder for GSK to argue that it is the victim of a few rogue elements
Seven weeks after GlaxoSmithKline was accused of wrongdoing in China, the allegations keep coming. The latest twist is the claim by Chinese police to have discovered an organised bribery ring within GSK's local office.
The significance of that tale is that ? if proved ? it would be harder for the company to argue that it is the victim of a few rogue elements within its workforce. The alleged corrupt practices would look more like a case of systemic malpractice, which could conceivably make GSK vulnerable to charges under UK or US anti-bribery laws.
At the moment, let's be clear, we are still talking about allegations. And some of the latest Chinese claims, to judge by the details in a state media report, look far from being a slam-dunk. For example, it is hard to understand why merely setting a target of 25% for sales growth could in itself constitute an inducement to salespeople to engage in illegal practices.
But what is clear is that the Chinese authorities are not letting go of this affair. Back in July it was possible to believe ? just ? that the journey from crisis to resolution would be swift. GSK would pay a modest fine, pledge to improve its monitoring of staff and some new form of working relationship would quickly emerge in which the Chinese state enjoyed lower prices for medicines.
Some or all of those elements may yet emerge, but settlement still seems miles away. By this stage GSK would surely have hoped to have got beyond the "deeply concerned" stage. Instead, the tale is getting messier ? and riskier.
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posted by pension333 @ 18:00
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