Pharma giant GSK in bribery probe
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E-mail China Daily, July 16, 2013
One way the executives obtained cash rake-offs was lying about the size of a convention. For example, the travel agency provided an invoice for a meeting of 50 people when it only involved 30 attendees, police said.
Liang is reported to have taken rake-offs of nearly 2 million yuan from Shanghai Linjiang from 2010 to 2012. "The four senior executives had respective travel agencies they worked with and took money for convention orders," police said.
The rest of the illicit money was used to bribe officials, hospital managers and doctors so that they would place orders for GSK drugs.
"I had been in contact with senior government officials and medical experts," Xinhua News Agency quoted Liang as saying.
Liang supervised about 3,000 medical representatives across China to deal with hospitals and doctors, and was authorized to approve an annual budget of hundreds of millions of yuan.
Raising drug prices
Weng Jianyong, legal representative of the travel service, said that when planning to visit officials and experts, Liang would call him to get some cash ready. Weng has also been held by police.
Liang told police that to introduce medicines into the market he had to deal with various authorities responsible for drug administration, pricing and medical insurance, as well as hospital directors and doctors.
The bribes could account for at least 20 percent of the prices of medicines, he said.
"Many imported drugs in China are sold at very high prices. Inherent in such high prices are the drug makers' operation costs which also includes the cost of bribes," said a former employee with a foreign pharmaceuticals company who wished to remain anonymous. "It's very common for sales staff to funnel money to doctors by various means, such as academic conferences and consultant fees."
Liu Xianquan, dean of the Law School at East China University of Political Science and Law, said he believes that the system for purchasing medicines in hospitals should be reformed.
"It's important for China's health authorities to make a change in the drug and medical equipment procurement system, which has a big loophole.
"Doctors rely on huge prescriptions of drugs to increase their income. In this regard, the patients have to bear more economic pressure."
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