In September 2014, after a 15-month investigation, GSK was fined the equivalent of approximately €390 million by the Chinese authorities, and five employees including the country manager were given suspended prison sentences3. GSK was accused of bribing doctors and hospitals and channelling illicit kickbacks through travel agencies of up to US$480 million (€375 mill) to favour the use of GSK products over competitors4. Chinese state-run media also accused GSK of tax evasion5 and manipulating drug prices6. Following internal and external investigations, GSK is currently facing similar corruption allegations in Syria7, Poland8, Lebanon and Jordan9, and Iraq10.
In 2012 the US Department of Justice penalised GSK US$3 billion (US$1 billion in criminal fines and US$2 billion in a civil suit), the largest ever payment by a pharmaceutical company at the time, for a multidimensional healthcare fraud. This fine was levied due to GSK failing to report safety data and introducing misbranded (off label promotion of) drugs. GSK did not disclose the dangerous side-effects (such as increased risk of congestive heart failure) of their diabetes drug Avandia. This crucial data was withheld from the US Food and Drug Administration between 2001 and 2007. Since then it has been estimated that it could have caused up to 100,000 heart attacks in the US.
GSK paid doctors to promote their antidepressant Paxil for under aged patients (side-effect: increased risk of suicidal thoughts) although it was not approved for patients under age 18. In a further case of off- label promotion, GSK paid for vacations of medical practitioners willing to promote the drug Wellbutrin (approved as a treatment for depression) ‘off label’ as a treatment for weight loss, sexual dysfunction, drug addiction and ADHD11. Despite a fine being levied of $3 billion (€2.3 bill) this only represents a small share of the estimated revenues of around US$10.4 billion for Avandia, US$11.6 billion for Paxil and US$5.9 billion for Wellbutrin over the years covered by the settlement12.
- GlaxoSmithKline: Policy on Preventing Corrupt Practices and Maintaining Standards of Documentation (accessed 25.08.2014) [↩]
- GlaxoSmithKline (2013): Corporate Responsibility Report 2013, p.35 (accessed 25.08.2014) [↩]
- Bradsher, K. (2014): China fines GlaxoSmith Kline nearly $500 milion in bribery case; New York Times, 20 September (accessed 13.10.2014) [↩]
- Ridley, K. (2014): UK fraud office liaising with China on GSK bribery case; Reuters, 23 July (accessed 25.08.2014) [↩]
- Jourdan, A., Wee, S., & Shao, X. (2014): GSK dodged millions in China drug tax scam: state media. Reuters, 19 May (accessed 25.08.2014) [↩]
- Bloomberg News (2014): Glaxo China Accused of Tax Evasion by Country’s Legal Newspaper; 19 May (accessed 25.08.2014) [↩]
- Hirschler, B. (2014): Exclusive: GlaxoSmithKline faces fresh drug bribery claims in Syria; Reuters, 11 August (accessed 25.08.2014) [↩]
- Neate, R. (2014): GlaxoSmithKline accused of bribing doctors in Poland; The Guardian, 15 April (accessed 25.08.2014) [↩]
- Goodley, S. (2014): GlaxoSmithKline says it is investigating bribery claims in Jordan and Lebanon; The Guardian, 16 April (accessed 25.08.2014) [↩]
- Hirschler, B. (2014): Drugmaker GSK investigates alleged bribery in Iraq; Reuters, 7 April (accessed 25.08.2014) [↩]
- United States Department of Justice (2012): GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data; 2 July (accessed 15.10.2014) [↩]
- Thomas, K., & Schmidt, M. (2012): Glaxo Agrees to Pay $3 Billion in Fraud Settlement; The New York Times, 2 July (accessed 25.08.2014) [↩]