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LONDON (Alliance News) - GlaxoSmithKline PLC said late Tuesday that it is under criminal investigation by the UK's Serious Fraud Office following a series of bribery allegations.
The FTSE 100-listed drugs giant confirmed that the SFO has opened a "formal criminal investigation" into its commercial practices.
The Serious Fraud Office is an independent UK Government department that investigates and prosecutes serious or complex fraud and corruption.
In April this year the company was hit by allegations of bribery in its Polish operations after a BBC Panorama programme reported that eleven doctors and one of the company's regional managers had been charged over alleged corruption between 2010 and 2012.
The programme said that the doctors had been bribed to promote Glaxo's asthma drug Seretide, and that the public prosecutor in the Lodz region of Poland had found evidence in documents from Glaxo to doctors that supported claims of corrupt payments in more than a dozen different health centres. At the time the company said that following the allegations in 2011, it had investigated the matter using both inside and outside of the company.
The allegations against its Polish business came just weeks after GSK said it was investigating allegations of improper conduct in its Iraq business. "We have zero tolerance for unethical or illegal behaviour," said the company after an article in the Wall Street Journal cited a person familiar with the matter saying that Glaxo was violating US and UK anti bribery laws by hiring government employed physicians and pharmacist in Iraq as paid sales representatives to boost the use of its products.
The firm said that the allegations related to a small number of individuals in the country. The investigations are ongoing.
At the beginning of April, GlaxoSmithKline said it sometimes withheld incentive payments to staff in China when it found potential issues with expenses claims, and has increased its monitoring and checking of claims in the country following bribery investigations by Chinese authorities.
The company is being probed by Chinese authorities following allegations that senior Glaxo executives had been involved in payments of up to USD500 million to doctors and hospital executives over the past six years. The allegations have led to the arrest of four Glaxo managers, with several more under house arrest. At the time of reporting its full year results Glaxo reiterated that it was too early to estimate the financial hit from the investigations.
After the start of the investigation, Glaxo said it increased its monitoring of expense claims in China.
Glaxo introduced changes to its sales and marketing practices last December, dropping individual targets for its sales representatives. The changes are expected to be rolled out worldwide by 2016 The new practices were brought in to "further align the company's activities with the interests of patients."
In a statement Tuesday GSK said it is "committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO."
Shares in Glaxo last traded at 1,634.5 pence per share.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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