(Photo : Glaxosmithkline)

The Chinese police is accusing pharmaceutical giant Glaxosmithkline (GSK) of spending 3 billion yuan (4.8 million USD) on financial and sexual kickbacks going back as far as 2007.

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With more than 700 middlemen discovered after a six-month investigation, the police claim that the company has funneled millions to health officials and doctors in order to prescribe their medications. The aim of the payoffs was to increase sales and have China raise the prices of their products. The massive bribery network is said to be run secretly by travel agencies and consultancies as money platforms, therefore making it difficult to find evidence of corruption in their accounts. The police also stated that the travel agents working with GSK executives hired young women to engage in "sexual bribery" as well. Other news has revealed that the head of operations in GSK China has recently left the country.

As of now, four GSK executives of the accused branch are in detention. The detainees are namely: Zhao Hongyan, 41, GSK's legal counsel and head of compliance; Liang Hong, 49, a vice-president in charge of operations; Huang Hong, 45, a general manager in charge of commercial development; and Zhang Guowei, 50, human resources director.

Despite lack of evidence, the police has not surrendered to uncover fully the crimes at hand. Glaxosmithkline has commented that these allegations were "serious" and wanted "an immediate stop". The pharmaceutical company has also shared their desire to help the Chinese police uncover the corruption crimes.

GSK has stated recently that they conducted a thorough investigation internally but have not found widespread evidence. However, Mr. Gao Feng, head of the economic investigation unit of China's Ministry of Public Security, said that they had not received any information from GSK regarding their said action.

The Chinese police are also suspecting that the travel agencies involved would fabricate corporate meetings and the budget funded are used instead to bribe doctors to prescribe GSK drugs. Doctors and other medical officials were paid kickbacks through the use of credit cards given to them by the company.

Investigations on GSK still continue and the Chinese police have hinted other huge pharmaceutical countries may be involved.