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By Adam Jourdan
SHANGHAI, April 25 (Reuters) - British drugmakerGlaxoSmithKline Plc has appointed two executives to newroles overseeing sales and marketing in China after authoritiesaccused the firm of corruption last year, a person with directknowledge of the decision told Reuters.
The move marks a significant change for GSK's sales andmarketing command chain in China, creating a wider gap betweenthe two key functions, the person said, asking not to be namedbecause of the sensitivity of the topic.
GSK's front line sales and marketing staff were at thecentre of a scandal last year when authorities accused thedrugmaker of funnelling up to 3 billion yuan ($480.08 million)to doctors and officials to encourage them to use its products.GSK has described the behaviour as "shameful".
Sales and marketing staff previously reported to a generalmanager for their particular therapeutic unit, meaning the twoareas' management more closely overlapped, the person said.
The new model would see a head of commercial and head ofmarketing separately oversee each function across the range oftherapeutic units, the person added.
London-based GSK spokesman Simon Steel confirmed the newappointments, but declined to give further details.
"As we have made consistently clear we are committed toChina and to serving the needs of patients ... The newmanagement team in the country are shaping our business to bestmeet that purpose," Steel told Reuters.
Pharmaceutical firms have been in the spotlight in Chinasince the launch of the GSK probe last year, with lawyers sayingthat most global healthcare firms in the country were nowreviewing their compliance process.
GSK is now also investigating claims that bribes were paidto doctors in Poland, Iraq, Jordan and Lebanon.
INTERNATIONAL GROUNDING
In addition to widening the gap between the two functions,the new appointments also suggest GSK is keen to have peoplewith international experience overseeing China operations toensure compliance with the firm's global standards. Previously,most unit general managers had been appointed locally.
German-national Thomas Willemsen, who led the firm'sTaiwanese unit, will lead commercial operations including sales,the source said. Willemsen previously spent a decade with MerckSerono in Europe and Asia, according to his LinkedIn profile.
U.S.-educated Wang Yizhe will take charge of marketing. Wangwas a senior director at GSK's oncology marketing unit in theUnited States before moving to Britain to lead a team workingwith emerging markets, the source added.
GSK has said it will overhaul its global sales model andstop paying medical professionals to promote its products. Thefirm will also employ hundreds more doctors in-house in a driveto eliminate "sharp" marketing practices.
Bribery between sales staff and doctors is rife in China,with steep sales targets and low salaries for doctors creatingfertile ground for backhanders. Local managers can create strongpower bases, lawyers and industry insiders said.
"This is another challenge for MNCs (multi-nationalcorporations) because for decades they have relied on theselocal teams. Suddenly these companies are having to examine howthey have achieved their rapid growth," said Leon Liu, partnerat law firm MWE China.
The head of marketing will still report to the head ofcommercial operations, the source said, both of whom answer toChina general manager Herve Gisserot, appointed in July lastyear in the wake of the corruption scandal.
($1 = 6.2489 Chinese Yuan) (Editing by Stephen Coates)
