1. GlaxoSmithKline
Scandal
Shiqiao Peng

2. History and Background
• The GlaxoSmithKline (GSK) is “a science-led healthcare company that
researches and develops a broad range of innovative medicines and
brands”.
• LOCATION With the headquarters in the UK, GSK has offices in more than
115 countries, such as UK, USA, Spain, Belgium, and China.
• GOAL “We are dedicated to improving the quality of human life by enabling
people to do more, feel better, and live longer.”
• GSK China GSK is one of the largest transnational pharmacy organizations
in China. GSK has invested over 500 million dollars and has created more
than 7,000 jobs and running a number of factories in China.

3. The Scandal
• In June 2013, news reports pointed out that GSK’s staff bribed doctors to
prescribe drugs . Xinhua news agency reported that a Glaxo sales manager
said that the company’s representatives “established good personal
relations with doctors by catering to their pleasure or offering them money,
in order to make them prescribe more drugs”.
• GSK issued a statement telling that no evidence has found to support that
report.
• The Ministry of Public Security in China conducted investigation into the
organization and found Glaxo used bribes and other benefits for doctors
and other public officials to increase its sales. The payments for doctors
and officials were “funneled through travel agencies, totaling approximately
$450 million”.
• 18 more Glaxo employees had been detained in the city of Zhengzhou,
Henan Province on July 26.

4. Organizational Response
• Verbal Response
• July 11: We take all allegations of bribery and corruption seriously. We
continuously monitor our businesses to ensure they meet our strict
compliance procedures. We have done thins in China and found no
evidence of bribery or corruption of doctors or government officials.
However, if evidence of such activity is provided, we will act swiftly on it.
• July 15: GSK “shares the desire of the Chinese authorities to root out
corruption” and that GSK will “take all necessary action required by the
outcome of this investigation”
• July 22: Certain senior executives of GSK China who know our systems
well, appear to have acted outside of our processes and controls which
breaches Chinese law
• Non-Verbal Response

5. Media Response
• The Focus Report (CCTV) produced an episode telling the story of GSK
crisis on July 16. The episode’s name is Reveal the untold story of GSK. The
program explaines how GSK use travel agency to briber doctors and
officials. Besides, it also blames GSK to spend the money on bribery and
transfer the cost to customers. Another CCTV program News One Plus
One also blamed GSK in a feature story, saying GSK’s advertisement of its
fast growth in China is more like an irony today.
• Baidu.com lists the timeline and news reports of GSK crisis on the right side
of the website when you search “GSK” through baidu.com. East Moring
News, Beijing Commercial Newspaper, China Daily, People Net, Southern
Daily News, NTES Finance, Jinghua Times, Xinjin News, Beijing Youths
Newspaper, and all major newspapers published news reports as the crisis
progressed.

6. Stakeholders Response
• Chinese Government
• Medical Industry
• Hospitals and Doctors
• Other Foreign Firms in China
• Ordinary Customers and Netizens

7. Recommendations
• Environmental scanning
• Internal Communication
• Be careful with the statement

8. References
AFP. (2013, July 25). Glaxo replaces chief of China unit at center of bribery inquiry. New York Times.
Retrieved from:
http://www.nytimes.com/2013/07/26/business/glaxo-replaces-chief-of-china-unit-at-center-of-bribery-inquiry.html
Barboza, D. (2013, July 11). GlaxoSmithKline accused of corruption by China. New York Times. Retrieved
from: http://www.nytimes.com/2013/07/12/business/global/china-accuses-glaxosmithkline-ofcorruption.html?_r=0
Barboza
, D. (2013, July 17). China bars GlaxoSmithKline executive from leaving a bribery inquiry. New York Tim
es. Retrieved from: http://www.nytimes.com/2013/07/18/business/global/china-bars-glaxosmithklineexecutive-from-leaving.html
Barboza, D. (2013, July 26). China details allegations against Glaxo. New York Times. Retrieved from:
http://
www.nytimes.com/2013/07/27/business/global/china-details-allegations-against-glaxo.html?_r=0
GSK China. (2013). GSK in China. Retrieved from: http://www.gsk-china.com/chinese/html/aboutus/gskchina.html
GSK. (2013a). About us. Retrieved from: http://www.gsk.com/about-us.html
GSK. (2013b). China investigation. Retrieved from:
http://www.gsk.com/media/resource-centre/china-investigation.html
GSK. (2013c). GSK statement regarding recent meeting with Chinese authorities. Retrieved from:
http://www.gsk.com/media/press-releases/2013/gsk-statement-regarding-re
cent-meeting-with-chinese-authorities.html
Henning, P. (2013, July 29). Lessons from the Glaxo Case in China. New York Times. Retrieved from:
http://dealbook.nytimes.com/2013/07/29/lessons-from-the-glaxosmithkline-case-in-china/
Jack, A., Jenkins, P. & Oakley, D. (2013, Septem
ber, 23). GlaxoSmithKline China sales face growing pressure. Ft.com. Retrieved from:
http://www.ft.com/intl/cms/s/0/20e5fe62-2462-11e3-8905-00144feab7de.html#axzz2iNzupy5X
Roland, D. (2013, July 24). Glaxo in China: History of a crisis. The Telegraph. Retrieved from:
http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/10200321/Glaxoin-China-History-of-a-crisis.html

9. Thank you!

10. Thank you!