GlaxoSmithKline Plc, the U.K. drugmaker that was the target of a Chinese government probe last year, is firing about 110 employees in the Asian nation for misconduct more than 18 months ago, people with knowledge of the matter said.
The disciplinary action is being taken in instances “where there is clear evidence of wrongdoing,” according to a notice sent to employees today that was seen by Bloomberg News. The memo was from Herve Gisserot, senior vice president and general manager for pharmaceuticals and vaccines for Glaxo in China and Hong Kong.
China fined Glaxo 3 billion renminbi ($479 million) in September. The company said at the time that Chinese judicial authorities had found it guilty of bribing non-government personnel and it “fully accepts the facts and evidence” of the investigation. Glaxo published an apology to the government at the time and pledged to overhaul its practices.
Glaxo has increased monitoring of expense claims and engaged an independent legal firm and external consultants to review its operations in China, the London-based company said in an e-mailed statement today in response to questions.
“Based on the findings, we have taken disciplinary action against employees whose conduct contravened GSK’s values and code of conduct,” according to the statement.
Disciplinary Cases
Disciplinary cases shot up in China last year, to 652 from 48 in 2013, according to Glaxo’s annual report. Overall, 3,947 employees were disciplined for policy violations last year.
Foreign drugmakers have faced a number of setbacks in China, including delays in getting drugs approved and increased government scrutiny. A 15-month investigation into Glaxo’s marketing practices in China curbed the company’s revenue. Its sales of drugs and vaccines fell 1 percent in the country last year.
“We continue to look at our business in China and expect to make further investments in the country as we evolve our business model there to best meet the need of patients and customers,” Glaxo said.
The company’s shares fell 0.4 percent to 1,565 pence at 2:31 p.m. in London, taking the decline to more than 6 percent in a year.
Bloomberg News, edited by ESM
