According to the New York Times, the problems with GSK's China operations have been going on for a while. It's worth distinguishing two types of trouble, though: there's the bribery scandal, where the company's representatives have been paying off people up and down the Chinese health system, and there's the scientific scandal at the Shanghai R&D site, which has led to a very public retraction and dismissal of employees. I make this distinction because the research end and the commercial end of a given drug company are usually quite far apart from each other; you have to go very high up the chain to find someone who's in charge of both.
What the Times has bears on the R&D problems, and it's not good. THey've obtained a confidential document dated November 2011:
Executives at the British drug maker GlaxoSmithKline were warned nearly two years ago about critical problems with the way the company conducted research at its drug development center in China, exposing it to potential financial risk and regulatory action, an internal audit found. . .
Auditors found that researchers did not report the results of animal studies in a drug that was already being tested in humans, a breach that one medical ethicist described as a “mortal sin” in the world of drug research. They also concluded that workers at the research center did not properly monitor clinical trials and paid hospitals in ways that could be seen as bribery.
That last part refers to a practice of paying clinical trial coordinators a flat fee for their services, regardless of how many people were enrolled at their site. This could be a way of paying someone for supposedly doing a full-time job when they're actually doing nothing of the kind. And that, I have to say, sort of mixes the paint together for all these stories: if even the clinical development group was paying people off, where does it end? Now we have a scientific scandal, a bribery scandal, and a scientific bribery scandal - if this goes on, I'm going to have to make a chart to keep it all straight.
I've been saying unkind and cynical things about the Chinese government while writing about the bribery scandal, and I don't plan on taking any of that back. But there are unkind things to say about GlaxoSmithKline, too. With all the information that's coming out, you have to wonder how well GSK was keeping an eye on things. The Chinese market is so huge, and so potentially lucrative, that some companies might just be tempted to say "OK, you folks are the XYZ Corporation's Chinese branch. Do what you need to do to stay competitive over here, but don't tell us about it, OK?" But I don't think that's something you can get away with, not forever. It catches up with you, especially when dealing with a government like China's that has no problem pitching high and inside when they feel the need.
GSK is a big company, full of people who understand how the world works. The Times document shows that they were aware of what was going on, and what could happen. And here it is, happening. Anyone on the inside who was sounding the alarm probably isn't getting much satisfaction about saying "I told you so", though.