GlaxoSmithKline China health care unit 'part of US probe'
Documents suggest that the drugmaker's previous problems in the mainland could be wider than originally thought
A US anti-bribery probe into GlaxoSmithKline touched on the firm's Chinese consumer health care business in 2012, internal documents show, suggesting the drugmaker's compliance problems in China could go wider than previously revealed.
GSK confirmed it had conducted an investigation into procurement practices in consumer health care in China, but said it did not find any "unethical conduct". It said the inquiry was unrelated to a Chinese criminal investigation into corruption in its pharmaceuticals division that was made public last year.
Three "preservation notices" seen by Reuters show GSK was conducting a focused investigation into specific people and suppliers in China at least as far back as 2012. The investigation was related to a US Department of Justice and Securities and Exchange Commission (SEC) inquiry into possible violations of the anti-bribery Foreign Corrupt Practices Act (FCPA).
"The preservation notices issued in 2012 relate to allegations around adherence to procurement policies within our Chinese consumer healthcare business," said Simon Steel, Britain-based spokesman for GSK, in a statement. "We investigated using resources inside and outside the company and did not find evidence of unethical conduct, but did identify some non-compliance with our procurement procedures and remedial action was taken as a result."
GSK has previously flagged that it has been part of a wider global investigation by the justice department and SEC into pharmaceutical corruption, including in China, since 2010, but few details of the scope of that investigation have been disclosed. The documents do not amount to evidence of wrongdoing by GSK or its partners, but show scrutiny falling on a part of its China business not previously seen as under inquiry.
Legal experts said that the more far-reaching the US probe, the greater the risk to GSK that it could ultimately face a multimillion-dollar settlement payment or fine. GSK's consumer healthcare segment, which spans products from Panadol painkillers to its Horlicks nutritional malted milk drink, raked in £5.2 billion (HK$65.1 billion) last year, a fifth of its global turnover.
The drugmaker is also facing bribery allegations in Syria, Iraq, Jordan, Lebanon and Poland. Chinese police have separately proposed corruption charges against GSK executives.
