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July 22, 2013
Update on the Bribery Scandal
This Reuters story may be telling people everything they need to know in the first paragraph:
British drugmaker GlaxoSmithKline said on Monday some of its executives in China appeared to have broken the law in a bribery scandal, as it promised changes in its business model that would lower the cost of medicine in the country.
GSK is the latest in a string of multinationals to be targeted by Chinese authorities over alleged corruption, price-fixing and quality controls.
Chinese police visited the Shanghai office of another British drugmaker, AstraZeneca, a company spokeswoman said on Monday. They arrived on Friday and took away a sales representative for questioning, she said.
Will AstraZeneca cut its prices for China as well? In case some readers may think I'm drawing conclusions too quickly, well, the Reuters story draws them for you:
GSK's intention to cut the price of its medicines in China would be in line with how other foreign companies have responded to pressure from Beijing.
European food groups Nestle and Danone said they would cut infant milk formula prices in China after Beijing launched an inquiry into the industry.
"In China, when the government criticises people, they tend to bow down and apologise very quickly because they are scared of the authority of the central government to do tremendous harm to their business - whether it be for arresting executives very quickly or through auditing," said Shaun Rein, managing director of the Shanghai-based China Market Research Group.
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