Pharmaceutical giant faces drug bribery claims in Syria

(Image courtesy of GlaxoSmithKline)

GlaxoSmithKline faces new allegations that it bribed Syrian doctors and officials to boost sales of its medicines, following recent accusations of corruption in its non-prescription business in the country.

The latest charges are laid out in an anonymous email sent to the company's top managers last week and seen by Reuters.

GSK - one of the few big firms still supplying drugs in Syria - said on Monday it would investigate the new claims involving its own staff and local distributors.

The company added it had suspended relations with its Syrian distributors pending results of the probe.

The attack on the drugmaker's ethical standards follows a series of similar bribery claims against the company in China, Iraq, Jordan, Lebanon and Poland.

Reuters last month reported allegations of corruption in GSK's Syrian consumer business, which sells products including toothpaste and painkillers. The consumer operation was closed in 2012 due to the worsening civil war in the country.

The Syrian prescription pharmaceuticals business remains operational, however, and GSK said it was committed to supplying safe and effective drugs and vaccines to patients in need.

The new corruption claims involve alleged bribes paid to boost sales of various medicines, including ones to treat cancer and to prevent blood clots.

“All the claims in this email will be thoroughly investigated using internal and external resources as part of
our ongoing investigation into operations in Syria,” said a spokesman for Britain's biggest drug maker.

“We are committed to taking any disciplinary actions resulting from the findings. We have suspended our relationship with our distributors in the country pending the outcome of our investigation.”

The claims of corruption in the country involve relatively small sums of money, running into thousands of dollars rather than the hundreds of millions that GSK is alleged to have funneled to doctors and officials in China.

GSK's business in Syria is small, with sales of less than 6 million pounds ($10 million) a year, against a group turnover of 26.5 billion pounds in 2013.

Nonetheless, the persistent nature of the allegations are damaging to the company's reputation and also leave it open to legal action and potential fines in Britain, where it is based, and in the United States, where it has a stock market listing.

Reputational damage

The Aug. 6 email from a person familiar with GSK's Syrian operations said the alleged bribes in its pharmaceuticals business took the form of cash, trips and free medical samples.

“GSK has been engaging in multiple corrupt and illegal practices in conducting its pharmaceutical business in Syria,” according to the lengthy email addressed to Chief Executive Andrew Witty and Judy Lewent, chair of GSK's audit committee.

The email cited names and dates of alleged illicit payments, including the case of a Syrian doctor who personally received between $200 and $300 a month in free samples in exchange for ordering GSK drugs for his hospital and rejecting rival ones.

The email also accused the company of bribing officials at Syria's Ministry of Health to obtain vaccines for illegal resale and said the company had stored them in an unapproved facility.

“We have zero tolerance for any kind of unethical behavior and we welcome people speaking up if they have concerns about alleged misconduct,” the GSK spokesman said.

The string of bribery claims has added to the pressures on Witty, who is also struggling to grow the group's profits in the face of sluggish sales of key drugs.

As was the case with previous whistleblower claims, the author of the latest email said information about alleged GSK corruption would be passed on to the U.S. authorities.

The U.S. Department of Justice is investigating GSK for possible breaches of the Foreign Corrupt Practices Act (FCPA), while Britain's Serious Fraud Office has launched a formal criminal investigation into its overseas activities.

A recently introduced U.S. government program provides cash incentives for whistleblowers to report corporate malpractice, including breaches of the FCPA.



Last Update: Monday, 11 August 2014 KSA 22:06 - GMT 19:06