GSK bribes reveal high drug prices

On July 11, a notice issued by the Ministry of public security became a heavy bomb in the domestic and foreign pharmaceutical circles: some senior executives of GSK (China) Investment Co., Ltd (hereinafter referred to as "GSK China") were put on file for investigation according to law due to suspected economic crimes such as serious commercial bribery GlaxoSmithKline, the 253rd largest pharmaceutical company in the world's top 500 and the 7th largest in the industry, has become the focus of attention at home and abroad for days What's the latest in the police investigation and how serious the crime is People obviously want to know more With these questions, Xinhua News Agency reporters flew to Changsha to learn more about the case and interview some suspects face to face Through more details of the cases that have been identified, the interest chain of commercial bribery of a multinational pharmaceutical enterprise is gradually clear, and the backhand of pushing the drug price to the virtual high begins to emerge Not "deep throat" pharmaceutical giant involved in the case originated from a travel agency June 27, GSK China vice president and general manager of business operations Liang Hong was taken away by the police for investigation On the same day, Liang Hong was taken away by Zhang Guowei, vice president and director of Human Resources Department of GSK China, Zhao Hongyan, director of legal department and Huang Hong, general manager of business development enterprise operation These four people are called "four carriages" of GSK China A stone stirs a thousand waves On the same day, rumors about "internal whistleblowers" and "deep throat" of GSK China and other multinational pharmaceutical companies began to spread in the industry, and people were worried for a while In fact, what really brings GSK China to the attention of the police is not the rumored "deep throat", but an unknown travel agency "Shanghai Linjiang International Travel Agency (hereinafter referred to as" Linjiang travel agency ") established in 2006 has done almost no tourism business, but only deals with some pharmaceutical companies." Police in charge of the case said that it is strange that the annual turnover of Linjiang travel agency has soared from millions of yuan at the beginning of its establishment to hundreds of millions of Yuan before the crime In the first half of this year, the Ministry of public security found that some travel agencies including Linjiang had abnormal business activities With the assistance of relevant departments, the Ministry of public security deployed the local public security organs involved in the investigation and found that GSK China and its affiliated enterprises were suspected of major economic crimes After mastering the conclusive evidence, the Ministry of public security clearly instructed the public security organs of Changsha, Shanghai and Zhengzhou to put the case on file for investigation, to carry out the centralized arrest twice on June 28 and July 10, and to take criminal compulsory measures against some senior executives of GSK China and some employees of several travel agencies On July 13, in Changsha, Hunan Province, the reporter met Weng Jianyong, legal representative of Linjiang travel agency, one of the persons involved in the case who was being interrogated "In recent years, Liang Hong and I have formed a tacit understanding He gave me the business list for the conference and I returned part of the money to him." Weng Jianyong said that since 2010, under the "care" of Liang Hong, he has obtained most of the conference projects of the Department in charge of Liang Hong As of 2013, the total amount of reimbursement was about 30 million yuan According to the regulations, Liang Hong's "benefits" are more than 2 million yuan According to the police in charge of the case, some of these benefits are directly paid to Liang Hong, and the other part is put in Weng Jianyong's office, where Liang Hong and his family can travel to different places and deal with some expenses that their company can't pay Weng Jianyong explained that Liang Hong made it clear to him that these "expenses that cannot be paid" are used to send money or buy gifts to a leader or expert of a competent department "Most of the time, Liang Hong called and said that if there is such a purpose, I will send the money to him and call him at any time with the money." Liang Hong's department is not the only one that GSK China "cooperates" with Linjiang travel agency Since 2009, Linjiang travel agency has undertaken various meetings and training projects of various departments of GSK China, and returned over 20 million yuan to some senior executives of GSK China through various ways Some of the money went into the pockets of senior executives, and the other part flowed down to the sales representatives at all levels and even the most grassroots medical representatives, becoming the source of funds for GSK China to bribe relevant departments and units Why do Liang Hong and others choose this way to get cash? The police said it was to avoid legal risks Regarding the internal financial management of GSK, the reporter inquired about Jin Mou, director of GSK China's shared financial service center in detail Her answer is "very strict" Her department will regularly supervise the financial operation of the company In recent years, some employees have been punished or dismissed because of problems in the accounts "If you want to pay bribes to outsiders, you can't get by on your books." Kim said, "our company's normal hospitality, gifts, single standard can not exceed yuan, the audit is very strict." After each meeting, Weng Jianyong will go to GSK China's financial department to report So, how did he even his book? "We usually increase the number of people in vain to cash out, for example, 20 people participate in the newspaper of 40 people About 20% of the projects I have cooperated with GSK are open, of which 50% are open with Liang Hong " Weng Jianyong said that there are also fictitious projects in their industry, and non-existent meetings are also invoiced for reimbursement Whether or not the meeting has been held and how many people have participated in it, the financial department of the company has no exact means or corresponding steps to verify That is to say, as long as the invoice conforms to the standard, it is easy to muddle through the formalities of reimbursement to the financial department More money reimbursed, not only returned to executives of pharmaceutical companies, but also travel agencies Weng Jianyong also explained: "the cake I got at GSK must not be the biggest." To this end, the reporter learned that GSK China's largest cold chain project raised 2 million yuan for a single bribe, which was also made by making false reports GSK China's annual meeting costs "more than 100 million yuan." Police in charge of the case told reporters that on the one hand, in addition to Linjiang travel agency, GSK China also maintained "cooperation" with a number of travel agencies; on the other hand, in addition to GSK China, Linjiang travel agency also helped a number of pharmaceutical companies to complete illegal cash out The reporter also learned that in order to undertake more business of GSK China, travel agencies such as Linjiang have done their best, not only to send cash, pay for tourism and other means, but also to use sexual bribery to provide a long-term "beauty" to a senior executive to maintain the relationship The Ministry of Public Security reported that in recent years, in order to open up drug sales channels and improve drug prices, GSK China has used travel agencies and other channels to bribe individual officials of government departments, medical and pharmaceutical industry associations and foundations, hospitals, doctors, etc by direct bribery or sponsorship projects In fact, GSK is also a "bad spot" in other countries: it has been severely punished in the United States, New Zealand, Italy for illegal acts such as commercial bribery; in July 2012, GSK agreed to pay the U.S Department of justice a fine of $3 billion to settle related charges such as improper marketing of antidepressants and failure to provide safety data on the diabetes drug Avandia A personage in the industry, who asked not to be named, said that the interest chain of pharmaceutical companies is actually the sales chain plus the bribery chain In terms of China, there must be more than GSK companies offering bribes However, unlike local pharmaceutical companies, foreign pharmaceutical companies with relatively perfect governance structure often resort to more covert means The above insiders also said that the top-down sales network of pharmaceutical companies may also be "packaged" at the top The more down-down problems, the more disorderly management, and it is an open secret for pharmaceutical representatives to directly bribe doctors and administrative departments Liang Hong admitted that he was generally in charge of "dealing with" the leaders or experts of the competent departments At the same time, he also "manages" nearly 3000 medical representatives from all over the country, directly facing hospitals and doctors Every year he has the right to approve a budget of hundreds of millions of yuan "If a drug is to be listed, it must deal with various departments Registration involves drug supervision, price involves the national development and Reform Commission, medical insurance involves human resources and social security, local bidding office, hospital president, department director, doctor, etc If there are fewer links involving drugs, there will be less corruption But fundamentally speaking, it is the biggest problem that medicine is not divided into two parts and that medicine is the basis of medicine " Liang Hong said Liang Hong also said that GSK's only source of income in China is drug sales, which means that a huge amount of "black gold" will be transferred to the drug price, and eventually the patient will pay for it The secret lies in the fact that the cost of the medicine is only yuan, and it can reach yuan when it is sold to the patients "What is the proportion of the composition of drug price?" The reporter asked Liang Hong "I estimate that the operating cost accounts for 20% - 30% of the drug price." Liang Hong said that over the past ten days, he has been reflecting on the fact that the proportion of such costs is indeed too high "If we can hold fewer meetings, we can reduce some costs and reduce the burden of the vast number of patients..." At this point, Liang Hong fell into silence At present, the case is still under further investigation The head of the relevant department of the Ministry of Public Security said that the GSK case only exposed the tip of the iceberg of the whole industry Serious investigation of this case is not only to deter commercial bribery crimes, warn those who act in accordance with the so-called "code of conduct" to stop at a precipice, but also to study the characteristics of such crimes, so that the relevant departments of the state can form a joint force, regulate the development of the pharmaceutical industry, improve the current situation of high drug prices, let pharmaceutical enterprises invest more funds in innovation and research and development, and let more people benefit from it 。