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China state media ups pressure on Britain's GSK in bribery

SHANGHAI, China -- Chinese state media increased the pressure on British pharmaceutical giant GlaxoSmithKline (GSK) over a bribery investigation Tuesday, accusing the firm of being responsible rather than individual employees.

The inquiry into GSK comes as authorities target foreign firms in fields ranging from medicines to food, sometimes for what analysts say is standard practice engaged in on a larger scale by domestic companies.

Police have already accused GSK staff of offering doctors bribes to prescribe its products and detained four executives.

GSK has admitted that some of its executives broke Chinese law.

But the official Xinhua News Agency said: “As the investigation is moving on, it is becoming clear that it is organized by GSK China rather than drug salespeople's individual behavior.”

GSK did not immediately respond to a request for comment.

Xinhua cited one of the detained GSK officials, general manager for business development Huang Hong, as saying the company set up a special team to handle important clients which had an annual “relations” budget of nearly 10 million yuan ($1.6 million).

The report did not say those funds were used for bribes.

Sales growth targets set by the firm as high as 25 percent put pressure on employees, Xinhua quoted Huang as saying.

“If we didn't have ... enough input into safeguarding customer relations, using some methods that broke the rules, it would be hard to meet such high sales growth targets,” she added.

A travel agency which allegedly served as a conduit for bribes to doctors also gave GSK executives kickbacks in return for business, Xinhua said.

The Shanghai Linjiang International Travel Agency — which has already been shut by authorities — gave more than 2 million yuan to GSK Vice President Liang Hong, who has also been detained, the report said, and at least two other executives.

Police in Shanghai, who are leading the investigation, could not be reached for comment.

At the same time as investigating GSK, Chinese authorities are mounting a broader probe into foreign pharmaceutical firms' pricing in the country.

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