GSK comments on media coverage of China problems

UK pharma giant GlaxoSmithKline (LSE: GSK), already the subject of allegations and investigations of wrongful marketing practises and bribery in China, came in for some lurid press coverage of the weekend, notably in The Sunday Times.

The newspaper reported that a sex tape featuring former GlaxoSmithKline China boss Mark Reilly may have been the catalyst for the investigation that has swamped the drugs major in the country. British subject Mr Reilly, a long time GSK executive, remains in China, though not in custody but not allowed to leave the country.

The newspaper published a near full-page article looking at the way GSK China has been run and focused on a secretly filmed video of Mr Reilly and his girlfriend at his flat in Shanghai which was e-mailed to senior staff including chief executive Sir Andrew Witty. The e-mail also included a repeat of previous allegations about the drugmaker using travel agents to channel kickbacks to doctors and Chinese officials.

The Financial Times followed up this morning on the coverage, noting that the “revelation adds another layer of intrigue to a saga that has roiled GSK for more than a year, damaging its China business and posing broader legal and reputational risks.”