GlaxoSmithKline News Update: GlaxoSmithKline in Bribery Scandal
GlaxoSmithKline News Update: GlaxoSmithKline in bribery scandal. Pharmaceutical sales fall sixty one per cent as a result of the bribery scandal in China.
The company’s ability to market its products in China has been hit by the bribery scandal and some of its sales have been taken up by rivals in the drug manufacturing business. GlaxoSmithKline Chief Executive Officer Andrew Witty said that business in China had definitely suffered because other drug options were readily available. One of the company’s top sellers the lung medication Advair/Seretide had immediately lost out to the rival Symbicort that is manufactured by Astra Zeneca.
Deutsche Bank analysts said that the slump was dire and had been far steeper than the investors in the pharmaceutical company had expected. The CEO said that at the moment it was too early to be able to predict whether the business would recover from the probe into the allegations that will now be investigated by the Chinese Government.
The allegations surround the fact that GlaxoSmithKline are being accused of bribing some doctors in China to promote the drugs that they are selling over those of their rivals. However Mr Witty did emphasise that there was no suggestion at all that GlaxoSmithKline would be pulling out of China altogether. He said that the company was totally committed to China and that the business generated in the Asian country was very important to them. He added that for the future China was seen as being critically important.
GlaxoSmithKline News Update
Growth in China has been modest at just four per cent but GlaxoSmithKline have been heavily investing in the country and also employs some seven thousand staff there in the research centre and the five factories that it operates. Worldwide sales of drugs made by GlaxoSmithKline were level at around six and a half billion pounds recoded in the quarter a sum that generated earnings of almost 30 pence per share which is a healthy ten per cent higher than figures recorded last year.
The forecast had been for around 6.65 billion pounds and it is thought that the higher than expected earnings reflected the lower costs that GlaxoSmithKline had initiated by cutting back on development and research at a time when some late stage and very expensive clinical trials were ending. Savings had also been made in post retirement healthcare, for some of its staff.
It will be interesting to see what the results of the Chinese Government enquiry are.
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