GSK Boss- Firm Staying In China Despite Corruption Scandal

January 9, 2014

(THE GUARDIAN) The boss of GlaxoSmithKline insists the pharmaceutical giant will not pull out of China despite a lurid corruption scandal that has wiped out two-thirds of its business in the world’s second-largest economy.

GlaxoSmithKline chief executive Sir Andrew Witty

GlaxoSmithKline chief executive Sir Andrew Witty

GSK, one of the UK’s largest blue-chip companies, reported that sales in the fast-growing Chinese market had dropped by 61% since July as buyers ditched its medicines and vaccines.  GSK is accused of using a £320m fund to bribe doctors and hospital officials with cash and prostitutes in order to sell its products. Witty was speaking as the pharmaceutical company unveiled its results for the third quarter, which revealed that global sales grew modestly at 1%.  He said media comments had led to sales dropping across GSK’s portfolio of products.


“The bottom line is that just simply the media in China, the commentary in China has created an anxiety, which has led to some disruption in the business.”

The Chinese state news agency Xinhua went on the attack last month, saying that the corruption scandal had been orchestrated by senior executives at GSK China, at odds with the defence of “bad apples” in the sales department that GSK had suggested. Witty declined to comment on the allegations in detail until the investigation is concluded.

“The activities described by the authorities are very serious and totally unacceptable. They are contrary to our values and to everything I believe in. We very clearly recognise there is a profound need to earn the trust of Chinese people again. We will take every action to do so. We continue to fully co-operate with the authorities and respect the progress of the investigation. As such there is very little further I can say.”

He said it was too early for the company to make decisions on setting aside money for fines or to assess the long-term damage to its China business.