July 15 - Police in China say GlaxoSmithKline channeled bribes to Chinese officials and doctors through travel agencies for six years to illegally boost sales and to raise the price of its medicines in China. As Sonia Legg reports it's the latest revelations about the British drugmaker.
Under interrogation - the Vice President and Operations manager of GlaxoSmithKline's China Investment Company. Liang Hong was filmed by state TV apparently revealing all. (SOUNDBITE) (Mandarin) LIANG HONG, VICE PRESIDENT AND OPERATIONS MANAGER OF GSK CHINA INVESTMENT CO LTD, SAYING: "We routed expenses that we couldn't claim through our company, including expenses that we incurred dealing with government departments. We used Lingjiang Travel Agency to channel money." For six years - according to China's police - the British drug maker channelled bribes through 700 travel agencies and consultants to illegally boost sales and raise the price of its medicines. The transfers - they say - totalled almost half a billion dollars and included instances of "sexual bribery". Liang is one of four senior GSK executives, said to have been detained. (SOUNDBITE) (Mandarin) LIANG HONG, VICE PRESIDENT AND OPERATIONS MANAGER OF GSK CHINA INVESTMENT CO LTD, SAYING: "We started to use Linjiang Travel Agency from 2010. We didn't use it in 2009 when we first started. We arranged about ten 'conferences', with the biggest one involving 2,000 people last year." GSK supplies many key products to China including vaccines and drugs for cancer and lung disease. It's previously said it had found no evidence of bribery or corruption in China. But Shanghai lawyer Peter Wang says the practice is a widespread. (English) A SHANGHAI-BASED PARTNER FOR LAW FIRM JONES DAY, PETER J. WANG, SAYING: "It is an issue all around the world these days. And you are seeing companies and officials in all of these places on both sides in many different industries implicated in these sorts of things. I don't think it is particularly picking on multinationals, but they are not going to be safe from investigation either." GSK is the latest foreign firm targetted by China. Nestle and Danone were recently accused of price fixing. But staying out of China isn't an option for most, particularly international drugmakers. By 2016 it's expected to overtake Japan as the world's second's biggest drugs market behind the United States.