The British pharmaceutical giant GlaxoSmithKline's company in China (GSK China) established a key account marketing team to bribe major hospitals, exposed GSK employees.
Four senior executives from GSK were held by Chinese police on suspicion of having committed serious economic crimes in July.
The suspects are believed to have offered large bribes to government officials, medical industry associations and foundations, hospitals and doctors in order to expand the company's market and raise the price of its medicine, according to the investigation team.
The bribes were generally given through travel agencies or in the guise of "project sponsorships."
GSK is also suspected of being involved in tax-related crime, including illegal cashing by falsely issuing exclusive value-added tax invoices and colluding with travel agencies to write false invoices and issue fake invoices in order to finance their illegal acts.
According to Huang Hong, GSK China business development manager, who is in charge of major account maintaining, the GSK China general manager Mark Reilly asked her to expand the major account marketing team in 2009 when he was just appointed.
And the team, starting with ten members, has over 50 at present.
According to Huang, GSK China funded hospital officials to participate in international conferences and forums, and designed diverse training courses for the hospital staffs, spending over ten million yuan annually to cultivate relations with the officials.
China has targeted foreign firms on multiple fronts in recent months, including alleged price-fixing, quality control and consumer rights, forcing companies to defend their reputations in a country where international brands often have a valuable edge over local competitors in terms of public trust.
Presented by Adam Justice