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GlaxoSmithKline – A Wake-Up Call for the Pharma Sector

Written by Robert Barrington on Thursday, 18 September 2014

Our response to today’s news that UK pharmaceuticals firm GlaxoSmithKline has been fined £297m for bribery by Chinese authorities. 

Today’s news that GSK is to be fined for bribery in China comes as no surprise.  It is often said that the Chinese authorities only launch investigations when they are fairly certain that a conviction will follow.  

Transparency International’s position is unambiguous on corporate bribery.  If a company pays a bribe, it should be punished.  And the individuals involved should be punished as well.  Too many bribery cases in the US and Europe result in settlements that leave a sour taste – with companies paying fines that have a negligible impact on the share price or bottom line, and individuals getting away with criminal behaviour.

But.  There is a but.  Transparency International also favours transparency and justice.  We know all too well that corruption charges can be used as a political tool.  We know very little indeed about most corruption cases in China including that of GSK.  We often do not know the charges, the evidence or the defence.  Confessions might appear, but it is unclear under what circumstances they have been obtained. This also leaves a sour taste.  There has been some admirable anti-corruption activity in China over recent months. Perhaps the real test of the government’s intent is when it starts to prosecute Chinese companies for paying bribes in overseas markets such as Africa.

GSK may be guilty.  How guilty, and of what, we don’t really know.  It is always depressing to see a great global company humbled by malpractice.  And most global companies have a high exposure to bribery risk, so there is always a strong possibility that they will feature in the next corruption headline.  What distinguishes the good guys from the bad guys is the quality of leadership.  Is this a one-off problem with a few rogue employees, or is it a systemic problem that was tacitly endorsed by those at the top?  This is where GSK now needs to convince governments, shareholders and the public.

It matters more in this sector than any others, because corruption has a direct effect on people’s lives and well-being.  We have recently launched a project to look into this.  It is a sector in which allegations abound about corruption and unethical practices.  No individual company seems more responsible than others – there has been a collective failure.  If something good is to have come from this episode, it may be that the industry receives a wake-up call.


Read 8052 times Last modified on Tuesday, 24 November 2015 12:18

Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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