Company Profile-GSK

We are a science-led global healthcare company

Our Purpose: To improve the quality of human life by helping people do more, feel better, live longer.
Our Goal: To become one of the world’s most innovative, best performing and trusted healthcare companies.
Our Strategy: To bring differentiated, high-quality and needed healthcare products to as many people as possible,
with our three global businesses, scientific and technical know-how and talented people.

Our Long-term Priorities: Our priorities are underpinned by our ambition to build a more performance focused
culture, aligned to our values and expectations.

 Innovation We invest in scientific and technical excellence to develop and launch a pipeline of new
products that meet the needs of patients, payers and consumers.
 Performance We deliver growth-based performance by investing effectively in our business, developing
our people and executing competitively.
 Trust We are a responsible company and commit to use our science and technology to address health
needs, make our products affordable and available and to be a modern employer.

Our values – Patient Focus, Transparency, Respect and Integrity.

Our expectations – Courage, Accountability, Development and Teamwork.
Our Business Model
We have three global businesses that discover, develop and manufacture innovative medicines, vaccines and
consumer healthcare products. Every day, we help improve the health of millions of people around the world.

Our operations span the value chain from Identifying, Researching, Developing and Testing ground-breaking
discoveries, to regulatory approval, manufacturing and commercialization.

We have over 99,000 Employees across 95 Countries with outstanding scientific and technical know-how and
deep expertise in regulation, intellectual property and commercialization.

We also work with world-leading experts and form strategic partnerships to complement our existing capabilities.
Innovation is critical to how we improve health and create financial value. As a research-based healthcare
company we rely on intellectual property protection to help ensure a reasonable return on our investments so we
can continue to research and develop new and innovative medicines.

In 2019 we invested £4.6 billion in R&D. In Pharmaceuticals and Vaccines, we focus on science related to the
immune system, human genetics and advanced technology.

In Consumer Healthcare we leverage our scientific expertise and deep consumer insights to create healthcare
products that meet consumer demands.

Our Culture We are building a more performance-focused culture, aligned to our values and expectations, that will
help us achieve our purpose and power our long-term priorities.

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Board of Directors in GSK:
 Sir Jonathan Symonds, CBE Non-Executive Chairman Age: 61 Nationality: British Appointed: 1 September
2019
 Emma Walmsley Chief Executive Officer Age: 50 Nationality: British Appointed: 1 January 2017 Chief
Executive Officer from 1 April 2017
 Iain Mackay Chief Financial Officer Age: 58 Nationality: British Appointed: 14 January 2019 Chief Financial
Officer from 1 April 2019
 Dr Hal Barron Chief Scientific Officer and President, R&D Age: 57 Nationality: American Appointed: 1
January 2018 Chief Scientific Officer and President, R&D from 1 April 2018
 Manvinder Singh (Vindi) Banga Senior Independent Non-Executive Director Age: 65 Nationality: British
Appointed: 1 September 2015 Senior Independent Non-Executive Director from 5 May 2016
 Dr Vivienne Cox, CBE Independent Non-Executive Director & Workforce Engagement Director Age: 60
Nationality: British Appointed: 1 July 2016
 Lynn Elsenhans Independent Non-Executive Director Age: 63 Nationality: American Appointed: 1 July 2012
 Dr Laurie Glimcher Independent Non-Executive Director and Scientific & Medical Expert Age: 68
Nationality: American Appointed: 1 September 2017
 Dr Jesse Goodman Independent Non-Executive Director and Scientific & Medical Expert Age: 68
Nationality: American Appointed: 1 January 2016
 Judy Lewent Independent Non-Executive Director Age: 71 Nationality: American Appointed: 1 April 2011
 Urs Rohner Independent Non-Executive Director Age: 60 Nationality: Swiss Appointed: 1 January 2015
GlaxoSmithKline fined $490m by China for Bribery

China has fined UK pharmaceuticals firm GlaxoSmithKline $490m (£297m) after a court
found it guilty of bribery.

 The record penalty follows allegations the drug giant paid out bribes to
doctors and hospitals in order to have their products promoted.
 The court gave GSK's former head of Chinese operations, Mark Reilly, a
suspended three-year prison sentence and he is set to be deported.
 Other GSK executives have also been given suspended jail sentences.
 The guilty verdict was delivered after a one-day trial at a court in Changsha,
according to the Xinhua news agency.
 Chinese authorities first announced they were investigating GSK in July last
year, in what has become the biggest corruption scandal to hit a foreign firm in
years. The company was accused of having made an estimated $150m in illegal
profits
 Whistleblower of The China Scandal
(Charges of Corruptions in GSK China)

1. Emails to Chinese regulators

Since December 2011, 24 anonymous tips from inside the GSK China were sent to
Chinese regulators in 17-month time, which was not known to GSK high executives until April
2012. The tips reported details of GSK's fraud and corruption in China to the regulators.
Although the company promised to the US regulators that they would not allow improper
marketing and kickbacks to doctors in July 2012 after a remarkable fine, it did not stop doing so
in China. Vivian Shi, GSK's head of government affairs in China, was fired as she was believed
to be the whistleblower, although officially, she was fired due to "falsification of travel
expenses"
2. Emails to GSK Headquarter
GSK board received an email in January 2013 where how China's branch committed fraud in its
operations was detailedly described in 5,200 words. The email was well written in English. The
email said that
1. “GSK China disguised tourist travel in the disguise of international academic
meetings”.
 2. “The company paid for the airline tickets and hotel rooms for such meetings to bribe
Chinese medical professionals”.
The email continued by accusing
3. GSK China of falsifying its books and records to illegally market drugs in China.

The whistleblower made examples by the drug Lamictal, which was approved in China only for
treating Epilepsy, but was marketed as a drug for bipolar disorder aggressively.
4. The drug killed a patient due to false marketing, but GSK chose to pay around
9,000 US dollars to silence the patient

3. Bribery to Chinese Drug Regulators:

However, the warnings of the whistleblower were just regarded as a "Smear Campaign" as
shown in the company's confidential report acquired by the New York Times.
Xinhua said that years before the scandal, the regulators across China were receiving tips about
GSK's bribery. In 2012, Mike Reilly, Zhang Guowei and Zhao Hongyan of the company even
founded a risk management unit to cope with the tips. They tried to bribed regulators in Beijing
and Shanghai and the relatives of the regulators. As confessed by a former GSK employee, he
tried to flatter a Shanghai investigator with an iPad and a 1,200-dollar meal and Mark Reilly
agreed him to bribe another Beijing official.
Another executive of GSK bribed regulator to change their focus to "unequal competition"
instead of "commercial bribery". The executive admitted that the company tried to limit the fine
within 50,000 dollars but failed
 Court Ruling
The trial on the company's commercial bribery was held in the Chinese city of Changsha on 19
September 2014. According to Xinhua, the trial at Changsha Intermediate People’s Court was
not public as requested by GSK who wanted to keep business secrets.
Mike Reilly was sentenced to 3-year jail sentences with 4-year suspension and
deportation from China.
Other three Chinese GSK employees were sentenced to 2 to 4 years.
The company was sentenced to a record 3 billion yuan fine.
The fine was the largest corporate fine in China, but GSK did not defend its actions.
In a statement after the trial, the company said it "apologizes to the Chinese patients, doctors
and hospitals, and to the Chinese government and the Chinese people."
The company said it had learnt from the mistakes and would do "Tangible Actions To Establish
Itself As A Model For Reform In China’s Healthcare Industry." the company also promised
to continue to invest in China and would change its incentive program fundamentally. A source
told China Business Networks that the sales group for hepatitis drugs, which was related to the
company's bribery plans, was downsized after the scandal.

GSK CEO Sir Andrew Witty, admitted and said

 "Published a Statement of Apology to The Chinese Government and Its People".

 "Reaching a conclusion in the investigation of our Chinese business is important, but this
has been a deeply disappointing matter for GSK,".
 "We have and will continue to learn from this. GSK has been in China for close to a
hundred years and we remain fully committed to the country and its people," he said.
 "We will also continue to invest directly in the country to support the government's health
care reform agenda and long-term plans for economic growth."
 Case Analysis:

This is a humiliating outcome for one of Britain's biggest companies: pleading guilty to
systematic bribery, facing the biggest fine in Chinese history and making an abject apology to
the Chinese government and people.

But after a case lasting more than a year, there was no easy way out for GSK, and at least now,
it can start to rebuild its battered brand in China.

Today GSK said it had learned its lessons, and one of those is clearly that foreign companies
need to keep a close eye on China's fast changing political and regulatory weather if they are to
prosper, or even survive, in this promising but perilous market.

Ethical Insight:
Corruption is the abuse of power or position for personal gain. It often involves bribery, as in the case of
British pharmaceutical company GlaxoSmithKline (GSK) in China. GSK bribed medical professionals to
push their drugs into the market. The company also bribed government officials to ease up on regulation.
Some patients were made ill because doctors were heavily motivated to prescribe drugs encouraged by
GSK, not the drugs that were best for their patients, in order to reap the highest financial rewards for
themselves. To curb corruption, the Chinese government levied large fines against the company and sent
several company managers to prison.