GlaxoSmithKline to Escape China Bribery Charges as Individual Executives Blamed

GlaxoSmithKline executives, but not the company, are likely to face criminal charges over bribery allegations in China as the government cracks down on corruption in the pharmaceutical industry.

Chinese officials revealed in July this year that four China-based senior executives at British drugmaker GSK channelled millions of pounds in bribes through travel agencies and consultancies.

The Ministry of Public Security (PSB) said that the unnamed GSK executives routed 3bn yuan (£324m, €375m, $489m) in bribes to doctors through travel agencies and consultancies to illegally boost sales and to raise the price of its medicines in China.

The PSB's head of the economic crimes investigation unit Gao Feng added that since 2007, the pharmaceutical giant used over 700 of these companies to enable the illegal transactions to take place.

However, GSK itself will escape criminal charges, as will as the group's former head of China operations, Briton Mark Reilly, according to a report by Reuters. The investigation is set to come to a close by the end of 2013.

Reilly has voluntarily assisted Chinese authorities with the pharmaceutical probe over the last few months.

If GSK did get stung with a criminal charge, it would have led to a much more serious outcome for the company as it "would imply higher-level corporate involvement and could result in major fines and even disruption to its operations in China," says the report.

However, the source familiar with the matter, said that the remaining unnamed GSK executives will most likely be charged with bribery allegations.

GSK declined to comment on the reports but it provided IBTimes UK with a statement on the allegations from China: "The investigation is ongoing and we are fully cooperating with the authorities. The investigation is subject to Chinese law and GSK respects this. As such, we are unable to comment further at this stage."