GSK Faces Criminal Bribery Investigation In Poland

GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors to promote its lung drug Seretide, adding to problems for a company already accused of corruption in China and Iraq.

Poland's Central Anti-Corruption Bureau, or CBA, said on Monday that 13 people had been charged in connection with the investigation launched by Polish prosecutors.

Britain's biggest drugmaker said one employee had been disciplined following a company probe into the matter and it was co-operating with the Polish authorities.

"The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result," the drugmaker said in a statement.

"We continue to investigate these matters and are co-operating fully with the CBA (Poland's Central Anti-Corruption Bureau)."

The case was highlighted by BBC Panorama, which reported that the investigation included 11 doctors and a GSK regional manager, charged over alleged corruption between 2010 and 2012.

GSK said the allegations related to the way a respiratory disease program was conducted in the Lodz region. The 2010-12 program centered on GSK's top drug Seretide, also known as Advair, which has worldwide sales of around $8 billion a year.

According to the BBC, one doctor has admitted guilt and has been fined and given a suspended sentence, after accepting 100 pounds ($170) for a lecture he never gave.

"In isolation, the events in Poland are trivial but evidence is building up of sharp practices in many areas of GSK's organization which will impact sentiment significantly," said Panmure Gordon analyst Savvas Neophytou.

GSK, whose shares fell 1.5 percent by 0845 GMT (4.45 a.m. EDT), recently took steps to tighten up its marketing procedures, including a move to stop the practice of paying doctors to speak on its behalf.

BIG PHARMA'S FAILINGS

International drugmakers interact on a daily basis with many thousands of doctors and disciplinary action for improper sales and marketing behavior is not uncommon.

A Reuters examination in 2012 of filings by the world's top 10 drug companies found that eight of them had warned of potential costs related to charges of corruption in overseas markets. Payments to government officials, including state-employed doctors, to obtain business are illegal under the U.S. Foreign Corrupt Practices Act and the UK Bribery Act.

GSK's 2013 Corporate Responsibility Report lists a total of 161 staff violations of sales and marketing practices, resulting in 48 dismissals or separations and 113 documented warnings.

In total, 375 employees were dismissed or agreed to leave the company voluntarily last year for various types of misconduct.

The level of dismissals is similar to that seen at Swiss rival Novartis <NOVN.VX>, which reported 357 dismissals and resignations related to misconduct in its 2013 annual report.

GSK faces its biggest challenge over corruption allegations in China, where authorities in July accused it of funneling up to 3 billion yuan ($483 million) to doctors and officials to encourage them to use its medicines in a case that rocked the pharmaceuticals industry.

Last week, the company said it was also investigating allegations of bribery in Iraq related to a small number of individuals in the country.