GSK is currently under investigation of commercial bribery. [File photo]
Employees of GlaxoSmithKline China have claimed they were given permission by high-ranking executives to maintain close relationships with and offer bribes to key figures at hospitals in order to drive sales.
In an interview with Xinhua news agency, Huang Hong, general manager for corporate operations at GSK China, said Mark Reilly, former GSK China CEO, ordered the setting up of a "big client team" to take care of deputy heads of major hospitals and pharmacy department heads at each hospital in order to secure sales.
Maintaining good relationships with these key figures could help raise sales at hospitals, Huang said.
She said company executives and staff in the finance and compliance departments acquiesced in the offering of bribes to hospital chiefs and doctors.
Huang said the company had set annual growth targets as high as 25 percent in recent years, or 7 to 8 percentage points higher than the industry average, putting great pressure on its employees.
Huang said she oversaw about 50 employees and was given about 10 million yuan (US$1.6 million) for "public relationship expenses" each year.
GSK's second-quarter sales in China added 14 percent annually to 212 million pounds (US$326 million), Xinhua said.
China accounts for just 3.5 percent of GSK's global drug sales but demand is growing fast — up 17 percent last year — and the company is investing heavily, with more than 7,000 staff in China, as well as five factories and a research center, according to Reuters.
Guo Jianhua, head of recruitment at GSK China, was quoted by the People's Daily newspaper as saying the company had turned a blind eye to illegal behavior. "When the problems were exposed, the company pushed all responsibilities to individual employees," Guo said.
A former sales representative surnamed Wang in Zhengzhou, capital of central China's Henan Province, told Xinhua she was given a list of doctors in major hospitals during her orientation. She was responsible for arranging meetings and academic forums for them to attend and to offer them tour packages.
"The finance departments and audit department sometimes even taught us how to make the receipts and invoices look ‘normal' and make sure these expenditures fell within compliance rules," she said.
It was alleged that Qiu Bilin, head of GSK's procurement department, had taken bribes from one of GSK's exhibition and conference organizers.
Wang Jianming, general manger of Comfort Group MICE Services Shanghai, told Xinhua he offered Qiu a total of more than a million yuan in cash, luxury bags and gold bars in order to secure procurement contracts.
The company's overall billings with GSK China totaled around 200 million yuan since 2008.
According to its website, Comfort Group MICE Services Shanghai is a wholly owned unit of China Comfort Travel Group and specializes in companies' annual conferences, product launch ceremonies and international academic conferences. Multinational pharmaceutical companies are its major clients.
The Ministry of Public Security said in July that several GSK China executives were involved in passing bribes totaling 3 billion yuan to government officials, medical associations and foundations, hospitals and doctors through 700 travel agencies.
In a statement yesterday, GSK said it was concerned about allegations of misconduct and would cooperate with the police investigation.
"The issues identified would be a clear breach of our corporate values and we have zero tolerance for any behavior of this nature," it said.
In July, the company appointed Herve Gisserot to replace Mark Reilly as general manager of China operations.