GSK investigates alleged bribery in Iraq
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[April 07, 2014]
By Ben Hirschler
— Drugmaker GlaxoSmithKline, already facing corruption
accusations in China, is now investigating allegations of bribery in
Iraq, the British company said on Sunday.
The latest controversy centers on claims that the
company hired government-employed physicians and pharmacists in Iraq
as paid sales representatives to improperly boost use of its
"We are investigating allegations of improper conduct in our Iraq
business. We have zero tolerance for unethical or illegal behavior,"
a company spokesman said.
The investigations are ongoing.
GSK employs fewer than 60 people in its pharmaceuticals operation in
Iraq and the allegations relate to a small number of individuals in
the country, the spokesman added.
Britain's biggest drugmaker was accused by Chinese authorities in
July of funneling up to 3 billion yuan ($483 million) to doctors and
officials to encourage them to use its medicines in a case that
rocked the pharmaceuticals industry.
GSK sales in China, where the company has a staff of around 7,000,
plunged in the wake of the scandal and it has recently dismissed
some employees in the country and withheld bonuses from others as it
seeks to root out wrongdoing.
While a number of major drugmakers have faced investigations into
their overseas practices under the U.S. Foreign Corrupt Practices
Act (FCPA), GSK's problems in China have been unusual in being
spearheaded by local Chinese officials.
GSK has previously described the Chinese corruption allegations as
"shameful" and the company recently took steps to tighten
procedures, including a move to stop the practice of paying doctors
to speak on its behalf.
The latest allegations concerning Iraq were first reported by the
Wall Street Journal, which said it had reviewed emails from a person
familiar with GSK's Middle East operations citing alleged corrupt
practices in Iraq, including continuing issues and alleged
misconduct dating from last year and 2012.
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One of the emails said the malpractices appeared to violate both
the FCPA and the British Bribery Act, both of which prohibit bribery
of foreign officials.
GSK said that operating in emerging markets was "challenging", given
the issues that many countries face in funding their healthcare
systems, but the spokesman said the firm remained committed to
providing medicines in multiple markets.
Building up business in developing economies is an important plank
of GSK's growth strategy and Chief Executive Andrew Witty has
described himself as an "extreme bull" on emerging market prospects.
Last week, the drugmaker announced plans to invest up to 130 million
pounds ($216 million) in Africa. It has also recently built up
stakes in local operations in India and Indonesia.
($1 = 0.6028 British pounds)
(Editing by Eric Walsh)
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