GSK's China bribery scandal — $490M fine, four executives arrested for bribing doctors

GlaxoSmithKline (GSK), a British pharmaceutical company, had been operating in China through a joint venture since 1998. By the early 2010s, China was a key growth market for GSK, but the company's sales practices had crossed into criminal territory. Chinese authorities announced in July 2013 that GSK had funneled HK$3.8 billion (US$490 million) in bribes to doctors, hospitals, and government officials through over 700 travel agencies and consulting firms.

The bribes included cash payments, sexual favors, and expensive gifts. Doctors were paid to prescribe GSK drugs, and the bribes were disguised as consulting fees, travel expenses, and speaking engagements. The scheme had been running since 2007. GSK's China general manager Mark Reilly was arrested along with three other Chinese executives.

In September 2014, a Chinese court found GSK guilty of bribery and imposed a fine of US$490 million — the largest ever levied against a foreign company in China. Mark Reilly was convicted at a one-day trial and left the country. He was deported from China and dismissed by GSK.

The scandal prompted investigations by the UK Serious Fraud Office and the US Department of Justice under the Foreign Corrupt Practices Act. GSK overhauled its compliance procedures, including ending the use of third-party agents for sales and linking executive compensation to compliance metrics. The case became a landmark for anti-corruption enforcement in China.