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GlaxoSmithKline Bribery & Corruption Case

Thomson Reuters Regulator Intelligence

REUTERS/Jason Lee

Know Your 3rd Party Risk

Christel Boutros

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AGENDA

• GlaxoSmithKline PLC Introduction

• GlaxoSmithKline PLC Bribery and Corruption Case

• Pharma Industry Bribery and Corruption Cases in 2016

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GLAXOSMITHKLINE PLC – INTRODUCTION

GlaxoSmithKline PLC is a research-based pharmaceutical company. The

Company develops, manufactures, and markets vaccines, prescription, and over-

the-counter medicines, as well as health-related consumer products.

GlaxoSmithKline provides products for infections, depression, skin conditions,

asthma, heart and circulatory disease, and cancer.

03-10-2016

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GlaxoSmithKline had to pay $20 million to settle U.S. foreign bribery case and settle civil charges

that it masked bribes to foreign officials in China by disguising them as legitimate travel, entertainment and

marketing expenses. The company's China-based subsidiary and a China-based joint venture violated

internal controls and record-keeping provisions of the Foreign Corrupt Practices Act.

From 2010 through June 2013, the company's employees and agents bribed officials in order to boost

its sales through increases in prescriptions and purchases by hospitals.

The payments came in the form of gifts, travel, shopping excursions and cash, among other things

such as medical association sponsorships, employee expenses, conferences, speaker fees and marketing

costs

The pharmaceutical company agreed to settle the case with the Securities and Exchange Commission

without admitting or denying any wrongdoing.

In a statement, the company said it had cooperated with the SEC and it had received credit for taking

steps to improve its operations, such as changing how sales representatives are paid and stopping the

practice of paying healthcare professionals to speak to doctors about the company's products.

The SEC's $20 million civil settlement with GlaxoSmithKline resolves the latest case to emerge from

an industry-wide sweep that started in 2010.

GLAXOSMITHKLINE PLC – BRIBERY AND CORRUPTION CASE

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This is not the first bribery scandal for GSK. In 2014, China fined GSK $490M after they

pleaded guilty to paying bribes to doctors and hospitals to have their products promoted. The

company was accused of having made an estimated $150M in illegal profits and a number

of GSK executives were jailed for this scandal.

PHARMA INDUSTRY BRIBERY AND CORRUPTION CASES IN 2016

2016 FCPA fines in the

pharma industry

Total amounting in

combined settlements.

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Thank you Q&A

REUTERS/John Kolesidis