GlaxoSmithKline has been handed a record fine in China of £298.7 million for bribing doctors to use its drugs.
Commenting on the fine, Mick Cooper, analyst at Edison Investment Research in London said: "GlaxoSmithKline will hope that this will draw a line under events in China, but it will take time for its Chinese commercial operations to recover.”
Ongoing investigations into corrupt practices elsewhere
According to new agency Reuters, GSK is now also facing investigations into its overseas practices by U.S. and British authorities, which could result in further penalties.
"The SFO criminal investigation into the commercial practices of GlaxoSmithKline Plc and its subsidiaries continues," according to an email from the Serious Fraud Office in Britain, which was published via Reuters online.
Additionally, the group has reportedly been accused of smaller-scale corrupt practices in Poland, Syria, Iraq, Jordan and Lebanon.
Chinese state news agency Xinhua reported that suspended jail sentences of between two and four years have been issued to Mark Reilly, formerly the head of GSK in China, and four other GSK executives.
Xinhua issued the following statement as part of its commentary on the case: “If GSK China can learn a profound lesson and carry out its business according to the rule of law, then it can once again win the trust of China's government and people.”
Reuters says that the fine is equal to around 4% of GSK's 2013 operating profits, but was less than some investors had feared. GSK will take a charge in the third quarter and pay the penalty from existing cash resources.
The official line from GSK is a statement of regret, and comes with the promise of becoming a "model for reform in China's healthcare industry".
“GSK Plc has reflected deeply and learned from its mistakes, has taken steps to comprehensively rectify the issues identified at the operations of GSKCI, and must work hard to regain the trust of the Chinese people,” according to GSK’s official statement.
GSK CEO Andrew Witty, said “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.”