GlaxoSmithKline plc (NYSE: GSK) Faces Corruption Rumors In Syria

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By Ross Schwartz on July 25, 2014 BioPharma

Allegations of corruption against GlaxoSmithKline (NYSE: GSK) are coming out of Syria. The drug making company and its distributer have been accused of bribing authorities to close business, according to an anonymous email detailing the company’s corruption.

These accusations against the British drug maker in the email date back all the way to 2010. The company stated this morning that they received the email last week on July 18^th.

The claims are about the company’s former healthcare procedures in Syria. The company’s operations were shut down in 2012 due to the deteriorating conditions of civil war in the country.

GSK stated that they have absolutely no tolerance for any type of unethical behavior. They said that they will thoroughly investigate all the issues brought up in the email.

Back in July of 2013, GSK was accused of corruption in China. Chinese authorities claimed that the pharmaceutical company had paid up to ¥3 billion, or roughly $480 million, to officials and doctors to bribe them to use GSK medicines. The former executive of GSK’s China operations was accused in May of being the force behind those bribes.

Since then, bribery claims on a smaller scale have been thrown at the British drug company. These allegations involved staff misconduct in countries overseas, including Iraq, Jordan, Lebanon, and Poland.

And now, Syria is the newest member of that list. The claims in this country focus on GSK’s consumer oral care products and the painkiller Panadol.

The email document was 5,000 words long, and was addressed to Andrew Witty, GSK’s Chief Executive, and Judy Lewent, GSK’s chair of audit committee. The email was from someone familiar with GSK’s system in Syria, and said that the cash bribes, fees, trips and free samples for samples were all in violation of Syria’s anti-corruption laws. These bribes were paid to dentists, doctors, pharmacists, and government officials to get proposals and unfair business advantages.

The allegations include two $1,500 to two doctors to illegally promote Panadol. Additionally, there were multiple payments and bribes for pharmacists and medics to stay at a Mediterranean resort.

Other cash bribes involved the promotion of GSK cold and flu products as well as Sensodyne, the premium toothpaste product.

The email criticized GSK in its Syrian operations, stating that the company has been involving itself in illegal practices, with virtually non-existent controls for internal operations in Syria.

Additional allegations detailed in the email included claims that GSK had engaged in export violations. The company supposedly planned to smuggle pseudoephedrine from Syria to Iran. Pseudoephedrine is a drug component for making methamphetamine.

The email also claimed that the British drug company used its own employees as well as its Syrian distributor, Maatouk Group, to make illegal payments. Officials at Maatouk Group refused to comment when ask by news sources. The company’s top executives were not available either.

In wake of the multiple corruption and bribery allegations from all over the world, GSK stated that it aims to be the first company in the pharmaceutical industry to avoid promoting its products by paying doctors outside the company. The company has announced that it plans to redesign its marketing procedures.

The email sender stated that the information would be sent to the United States Securities and Exchange Commission (SEC) and the United States Department of Justice.