Police in
China on Thursday revealed details of GlaxoSmithKline (GSK) China's alleged
bribery and tax-related violations that pushed up drug prices and disrupted
market order.
After the
Ministry of Public Security announced on July 11 that some employees from GSK
China were being investigated for suspected bribery and tax-related violations,
more individuals involved in the case, including salespeople and doctors, are
now under investigation.
Xinhua has
learned from police officers handling the case that they are suspected of
offering bribes to doctors, asking them to prescribe more drugs in order to
grow sales volume, and in the meantime pushing up drug prices.
OFFERING
BRIBES TO DOCTORS
A man
surnamed Li, 31, is a regional sales manager at GSK China in central China's
Henan province and in charge of selling respiratory drugs to more than 10
hospitals in the province's capital city Zhengzhou.
He said
before taking post, a GSK China salesperson will receive special training not
only on information of specific drugs, but also sales skills and methods,
especially how to maintain relations with hospitals and doctors.
In a bid to
start their work, pharmaceutical representatives will have 10,000 yuan
(US$1,667) of funds, and a namelist of doctors from all around the country and
files on them.
They
invited doctors to join high-end academic conferences to help the practitioners
increase influence in their fields. They also established good personal
relations with doctors by catering to their pleasures or offering them money,
in order to make them prescribe more drugs.
A
35-year-old female medical representative surnamed Wang working under Li said
she entered doctors' offices to act as their assistant, and meet their needs as
much as possible, even their sexual desires.
Wang said
GSK China's executives already knew this, and some executives gave clear
directives to the sales department to offer bribes to doctors with money or
opportunities to attend academic conferences.
ECONOMIC
VIOLATIONS IN DISGUISE
Police said
about 7%-10% of sales volume went to doctors' personal accounts. Once a doctor
agrees to cooperate with GSK China, the company will establish the doctor's
file and pay a bonus to the doctor based on his or her prescriptions of the
firm's drugs.
For those
doctors who avoid receiving money, GSK China's salespeople would invite them to
academic meetings or lectures and provide them with gifts, free travel after
meetings and lecture fees.
In fact,
many doctors received lecture fees even when the lectures did not exist. Wang
just forged lecture materials in order to obtain reimbursements from the
company.
The police
found that under GSK China executives' acquiescence and even encouragement in
forged forms, pharmaceutical representatives reimbursed a large amount of money
in the name of lecture fees, covering various expenses including travel and
other entertainment, to help the company avoid legal risks.
TURNING
DOCTORS TO DRUG SELLERS
Yu Fu
(pseudonym), a respiratory department director of a reputable hospital (the
name of which was not disclosed), became a client of Wang in 2011.
"When
the GSK representative came to me, he told me their company was a leading one
in the world, and attached great importance to academic activities," Yu
said. "He told me the company also sponsored doctors to attend national or
international conferences, covering their registration fees and travel."
Yu said,
"After we got more familiar, Wang visited me at festivals, treating me to
dinner and buying me gifts. When our department held events, Wang also paid the
bill."
Later on,
Yu recalled, Wang blatantly offered kickbacks to doctors, for example, 20 yuan
(US$3.26) for each pack of Seretide, an asthma-treating inhaler; and 10 yuan
for each dose of Flixotide, an asthma-treating spray. Wang made all doctors in
Yu's department his clients.
According
to Li and Wang, the company set the target of raising drug sales by 30 percent
annually in the last two years, and the target can only be achieved by pushing
doctors to prescribe more if there are no increases in the number of patients.
Yu said,
"Generally speaking, hospitals are also inclined to prescribe more."
Wang said
bribery related to expenses will push up the sale price of drugs.
On July 21,
when Abbas Hussain, a president of GSK in charge of international business, met
with a senior official from the public security ministry, he professed GSK's
plan to adjust the company's business model to cut operational costs in drug
prices.
Insiders
said squeezing out the bribing cost in drug prices, curbing inflationary drug
costs and excessive medical care will bring tangible benefits for consumers. The
clampdown provides a good opportunity to tighten supervision.
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