Benjamin Li
Jul 15, 2013

Ethical grounding likely to help minimise GSK fallout in China

BEIJING – PR industry observers suggest that recent confessions by GlaxoSmithKline (GSK) executives to involvement in bribery and tax offences in China are unlikely to prove a long-term setback for the company.

GSK is under investigation for malpractice in China
GSK is under investigation for malpractice in China

Reports last Thursday pointed to bribery involving government officials and medical professionals and the use of falsified receipts for tax purposes. The company is said to have sought to illegally increase sales and the price of its medicines in the market, according to Reuters.

Dr. VJ T. Yamat, healthcare director at Havas Life Southeast Asia, predicted that the brand would recover in a relatively short time due to its fundamentally ethical approach to business. Yamat said that, assuming that certain employees did indeed engage in malpractice, it would be seen as the exception rather than the rule.

Yamat said it is important that GSK reprimand the individuals concerned publicly even if it may have a negative financial impact in the short term. He added that companies such as GSK must ensure that ethical practice is communicated as a core value to employees at all levels.

Though unable to comment on GSK directly, Richard Barton, managing partner of Newgate Communications, said that in general terms, a proactive public relations strategy could make the difference between resilience to scandal and lasting damage.

“Strong market engagement with a brand can be crucial to generating support,” Barton said. “This means a presence should be built across both industry and consumer media. It must also be digital, as this is by far the most important platform for accessing medical information. Companies must also prepare for uncertainly, and for judgment by social media.”

Carmen Li, director of Ipsos Healthcare in Hong Kong, said the issue surrounding GSK could result in tighter regulations for the industry and improved training for sales staff. But she cautioned that further instances of corruption seem “inevitable” due to heightened pressure on the pharmaceutical industry. She cited shrinking pipelines and the expiry of patents as factors likely to encourage executives to illegally incentivise officials and physicians to list their products.
 

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