China continues to step up its probe into alleged bribery by British drugmaker GlaxoSmithKline to illegally boost sales and inflate the price of its medicines.
Top fraud investigators have said that senior Chinese executives from the firm passed bribes to government officials, doctors, hospitals and industry associations using travel agencies as conduits for the cash.
Briefing reporters, the Public Security Ministry also said sexual favours were offered as bribes.
Glaxo has said it was deeply concerned by the developments and “shares the desire of the Chinese authorities to root out corruption”.
The bribery investigation has sent tremors through similar firms in China.
Reuters reported that senior managers from another multinational pharmaceutical firm there were warning staff to make sure they were in compliance.
“The message from the top is that if I have to choose between compliance and winning business, I would rather lose the business,” one unidentified employee at that company told the news agency.
Experts said foreign companies across the spectrum were watching closely to see what happened to GSK and its four detained Chinese executives given that bribery and business go hand-in-hand in the world’s second biggest economy.
On top of the police probe, China’s National Development and Reform Commission is examining prices charged by 60 local and international drugmakers including units of GSK, Merck, and Astellas Pharma.
“All the other players in the industry will be taking a look at their procedures, whether they face any active investigations or not,” said John McFarland, head of fraud prevention at Hill & Associates, based in Singapore.
When announcing the accusations against GSK, Chinese police said they had uncovered information that pointed to similar violations made by other multinational pharmaceutical firms, although they have not named any companies.