China fined British drug maker GlaxoSmithKline Plc $492 million on Friday for bribing doctors and health care officials, state-run news agency Xinhua reported. The ruling comes after the Ministry of Public Security initiated its first investigation into the bribery case in June 2013.
GSK's former China head Mark Reilly was given a three-year suspended prison sentence and will be deported, media reports said citing Xinhua, while four other GSK executives were also given suspended jail sentences by the Changsha Intermediate People's Court in Hunan province. The court reportedly granted the executives leniency because they confessed, state media reported.
The company said in a statement Friday that GSK China Investment, or GSKCI, has been “identified to have offered money or property to non-government personnel in order to obtain improper commercial gains,” and apologized to the government and the Chinese people.
“The illegal activities of GSKCI are a clear breach of GSK plc’s governance and compliance procedures; and are wholly contrary to the values and standards we expect from our employees,” the company said, in the statement. “It is deeply disappointing that these issues were not identified and addressed. GSK plc has reflected deeply and learned from its mistakes, has taken steps to comprehensively rectify the issues identified at the operations of GSKCI, and must work hard to regain the trust of the Chinese people.”
The record penalty reportedly follows allegations that the pharmaceuticals giant made illegal payments to doctors and hospitals in order to promote its products.
According to The New York Times, investigators had said in May that Chinese police had accused Reilly of creating a “massive bribery network” that brought illegal revenues worth more than $150 million to the company.
“Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK. We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country and its people,” GSK CEO Andrew Witty said, in a statement. “We will continue to expand access to innovative medicines and vaccines to improve their health and well-being. We will also continue to invest directly in the country to support the government's health care reform agenda and long-term plans for economic growth."