For a long time, there’d been this policy of going easy on foreign enterprises. The government didn’t want to cause embarrassment or give outsiders the impression that China is plagued with corruption. But they’re not thinking like that anymore. ~ American legal advisor Jerome Cohen
The corruption of British drug maker GlaxoSmithKline may have been stupidly egregious, but it still is exemplary of how large corporations operate. Other multinational pharmaceutical companies, including Eli Lily and Pfizer, have also been caught out on similar practices.
Glaxo committed systematic fraud and corruption in China, and in other countries across the world, by bribing doctors and hospital workers who prescribed its medicines.
Another tactic was to aggressively market medicines for unauthorized treatments. Glaxo almost killed one Chinese patient with this practice. They bought her silence for $9,000.
For over a year, the company brushed aside repeated warnings from an inside whistleblower in China, then retaliated against her.
The company could not even find the fraud that was going on. Its internal compliance scheme was a cover-up operation.
We take all allegations of bribery and corruption seriously. 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. ~ Glaxo in 2013
Once Chinese government officials got wind of Glaxo’s illegal actions, Glaxo bribed them to try to make the problem go away. The company did not even bother to investigate the allegations, change its marketing practices, or heighten its internal controls.
In 2014, following a 1-day trial, Glaxo paid a $491 million fine to China. This was on top of a $3 billion fine in 2012 that Glaxo paid for similar criminal activity in the United States.