GlaxoSmithKline (GSK) has been accused of bribing doctors in China in order to boost sales. Chinese government officials say they have uncovered evidence of a bribery scheme involving 700 travel agencies who were used to funnel as much as three billion yuan ($480 million) in payments.
“We found that bribery is a core part of the activities of the company,” Gao Feng, the head of China’s fraud unit, said. “There is always a big boss in criminal organisations and in this case GSK is the big boss.”
Allegations about bribes at GSK first surfaced in January of this year in a series of tips made by an anonymous individual to company officials. The whistleblower alleged that the UK company made payments of $249 to $490 to promote Botox, a toxin used for medical purposes as well as for cosmetic purposes to get rid of wrinkles.
Soon after, the Wall Street Journal says it reviewed documents from as late as April 2013 for an internal GSK project called “Vasily” to pay 48 doctors who promoted Botox with “either a percentage of the cash value of the prescription or educational credits” depending on how many sales they made. GSK officials were encouraged to discuss the scheme on personal email accounts.
“I recommend that everyone else use a private email account because it will be better that way,” Ruiting “Candy” Chen, Glaxo central nervous system marketing manager said in an email translated by the Journal. “Remember you must send to personal email accounts, you accidentally sent to [another sales team member’s] public mail, careful next time!” wrote Any Zheng, Botox regional sales manager.
Chinese media reported on Monday that GSK allegedly made payments to the travel agencies which then transferred the money to doctors via credit cards when they made prescriptions. The travel agencies booked the payments for travel expenses to fake meetings.
GSK says it has suspended all work with the travel agencies. It also says Vasily was never implemented and has denied the charges.
“We take all allegations of bribery and corruption seriously,” a spokesman said in a press statement. “We continuously monitor our businesses to ensure they meet our strict compliance procedures. We have done this in China and found no evidence of bribery or corruption of doctors or government officials. However, if evidence of such activity is provided we will act swiftly on it.”
Chinese officials say that Mark Reilly, the head of GSK operations in China, fled the country on June 27 and has not returned. Several other executives have been arrested.
“The anonymous claims highlight the challenges multinational pharmaceutical companies face in China, one of their most significant and fastest-growing markets, because its health-care system is controlled and owned by the state and it has a tradition of government patronage and gift-giving,” write Christopher Matthews and Jessica Hodgson of the Wall Street Journal.
In reality, the comment by the Journal reporters reflects a bias on their part. GSK has been found guilty of routinely offering U.S. doctors lavish payments for promoting company products, despite the absence of a state health care system.
In July 2012 GSK agreed to pay out $3 billion to settle charges on pushing bupropion and paroxetine (as well as their failure to report safety data about the drug Avandia to the U.S. Food and Drug Administration) — the largest such fine ever paid by a pharmaceutical company.
The U.S. Department of Justice noted that the company gave out “cash payments disguised as consulting fees, expensive meals, weekend boondoggles and lavish entertainment.” For example, doctors who promoted Wellbutrin were taken on “training sessions” to Jamaica. “Dr. Drew,” a TV doctor, was paid $275,000 in two months in 1999 alone to “deliver messages about [Wellbutrin SR] in settings where it did not appear that Dr. Pinsky was speaking for GSK.”
Nor was it the only Western pharmaceutical company accused of paying bribes to doctors to promote its products. In August 2012, in a criminal complaint issued by the U.S. Securities and Exchange Commission, investigators laid out detailed charges against Pfizer for paying bribes in eight countries: Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia.
For example, Pfizer Italy employees provided free cell phones, photocopiers, printers and televisions to doctors, arranged for vacations (such as “weekend in Gallipoli,” “weekend with companion” and “weekend in Rome”) and even made direct cash payments (under the guise of lecture fees and honoraria) in return for promises by doctors to recommend or prescribe Pfizer’s products.
Under the circumstances, I wondered if a pilot scheme was underway in Ireland already, with Shell sponsoring the Garda? Was some foolish government official or department conned into believing that Royal Dutch Shell is reputable? If so, I would have thought the sponsorship should flow into state coffers, rather than down the throats of apparently very thirsty police officers.
EMAIL TO JUSTICE MINISTER OF IRELAND, MR ALAN SHATTER TD.
Acting on Shell’s instructions, OSSL has distributed gifts (bribes) on Shell’s behalf to parties connected with the controversial Corrib Gas Project. This includes the Irish police force (the Garda) who have been the subject of serious accusations of wrong doing by environmental activists protesting against the project. If this statement of fact, or any of the allegations we have published on this matter since September 2012 are untrue, why have no defamation proceedings been issued against OSSL, or against us? What is the Irish Justice Ministry doing? Why no action by Shell’s Chief Ethics & Compliance Officer? How long can this disgraceful state of affairs continue? The scope of the corruption of the Irish state by Shell has yet to be revealed.
EMAILS SENT BY OSSL ON 1 MAY 2013 TO SENIOR PEOPLE AT SHELL AND SENIOR IRISH POLICE OFFICERS
From: THE OSSL COMPANY <firstname.lastname@example.org>
Date: 1 May 2013 07:51:37 BST
To: Michael Crothers <email@example.com>, Peter Voser <firstname.lastname@example.org>, Michiel Brandjes <email@example.com>, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, Ann Hamilton <firstname.lastname@example.org>
Subject: Shell threaten small vendor in a Dublin restaurant..
A senior Shell executive from the Corrib Gas project threatened two members of a small supply company in a Dublin restaurant that “if they revealed details of cash payments to householder and supply of alcohol to local police “that he would see to it that they would “never work in the industry again”
Michael Crothers has full details ..but others in Shell say they were not aware of this until now .. Has this information been suppressed ?
CHIEF SUPERINTENDENT JOHN GILLIGAN ARE YOU LISTENING? THIS IS WHAT HAPPENS WHEN YOU COMPLY WITH SHELLS WISHES ARE YOU HAPPY WITH THIS SITUATION?
Sent from my iPad
SECOND EMAIL – THE CONSPIRACY OF SILENCE
From: THE OSSL COMPANY <email@example.com>
Date: 1 May 2013 08:22:24 BST
To: firstname.lastname@example.org, email@example.com, Michael Crothers <firstname.lastname@example.org>, email@example.com, xxxxxxxxxxxxxxxxxxx, firstname.lastname@example.org
Subject: It’s not the outstanding booze money that matters …
……it’s that the conspiracy of silence has cost decent people their jobs ….if you need to know more just ask …
Sent from my iPad
(We have deleted the identity of one recipient)
Posted in: Bribery, Business Principles, Corrib Gas Project, Corruption, Gas,GoogleNews, Ireland, Royal Dutch Shell Plc.
Tagged: Corrib Gas Project · Gas · Ireland · Michael Crothers Shell · Peter Voser · Royal Dutch Shell Plc
(Video: Includes a warning by Superintendent John Gilligan at 4.40 on the dangers of alcohol – amusing presentation glitch at 4.15)
“If I do not receive a response on Monday 29 April, I will assume that you do not wish to comment and I will publish this email on Tuesday. If you need more time to consider the matter, please let me know tomorrow when I can expect a reply. If there is no denial, people will be entitled to draw their own conclusions.”
From: John Donovan <email@example.com>
Subject: Shell Corrib Gas Scandal: email to Detective Superintendent John Gilligan
Date: 28 April 2013 08:10:57 GMT+01:00
Dear Detective Superintendent John Gilligan
As I am sure you are aware, we have over the past several several months published a series of articles (headlines below) relating to the supply by Shell E&P Ireland of free alcohol to the Irish police, on what we have described as being on an industrial scale. We understand that the legitimate retail cost in Ireland for the river of free booze could approach €100,000 euros. So it’s not small beer.
We have copies of related correspondence between Shell’s “Mr Fixit” company in Ireland – OSSL – and yourself. I refer to the letter from OSSL dated 28 February 2011 and a response letter from you dated 5 May, when you effectively declined to comment. You have been on the circulation list of a number of OSSL emails sent subsequently to Shell and other parties. As I am sure you are also well aware, I drew these matters to the attention of Alan Shatter TD, the Irish Minister of Justice early in April. Although I received acknowledgements for receipt of the information supplied, I have not heard anything further. Perhaps an investigation is underway?
The matter is obviously a serious one given the background circumstances, with allegations that the Garda has acted as an offshoot of Shell security in policing protests against the controversial Corrib Gas Project. You will be aware of the serious related accusations against the Garda made by some protestors.
Since OSSL claim that you have had a hand in these matters, and bearing in mind the articles we have published without receiving any comment from involved parties, other than OSSL, I thought it appropriate to offer you the right to reply?
If you wish to take up this invitation, anything you have to say will be published on an unedited basis.
If I do not receive a response on Monday 29 April, I will assume that you do not wish to comment and I will publish this email on Tuesday.
If you need more time to consider the matter, please let me know tomorrow when I can expect a reply.
If there is no denial, people will be entitled to draw their own conclusions.
HEADLINES THUS FAR