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GSK cuts 150 China staff for improper sales practices

UK drug maker GlaxoSmithKline (GSK) has sacked over 150 staff in China amid a probe into allegations that the firm bribed doctors and government officials to boost drug sales, according to the 21st Century Business Herald (21CBH).
The mass firing came ten months after bribery allegations emerged against the company. Chinese authorities last year accused GSK’s sales staff of faking conference expenses and funneling about $480 million in bribes through travel agencies to doctors and officials for drug prescriptions.

After the bribery scandal broke out, GSK conducted internal investigation of expense claims. The company found that nearly 1,000 sales representatives had suspected compliance problems, resulting in the recent action against some of them, a GSK sales staffer told 21CBH.

The company has declined to specify the exact number of employees being dismissed, but the inside  source said at least 150 people were fired.

The termination has triggered protests from sales staff, who claimed the company failed to reimburse their expenses or pay their bonuses, and treated them unfairly.

The company admitted confiscating bonuses of some sacked employees. “Where we have found potential issues, we are thoroughly reviewing them and have withheld incentive payments where appropriate,” it said.

Some GSK employees were asked to sign a confession in return for a waiver from the company of penalties, the inside source alleged. However, the company later used the confessions as an excuse to sack them, the source reported.

The company announced a new global policy in December to stop paying doctors to attend medical conferences.

It is also investigating a fresh bribery allegation that its pharmaceuticals division in Iraq hired government physicians and pharmacists in Iraq as paid sales representatives to improperly boost its sales.

Sources: Wall Street Journal, Reuters, 21st Century Business Herald (21世纪经济报道)


Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.

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