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Glaxo to Pay $20 Million to Settle U.S. Bribery Case in China

GlaxoSmithKline will pay $20 million to settle civil charges that it disguised bribes to foreign officials in China as legitimate travel, entertainment and marketing expenses, United States regulators said on Friday.

The pharmaceutical company agreed to settle the case with the Securities and Exchange Commission without admitting or denying wrongdoing.

In a statement, the company said it had cooperated with the S.E.C. and had received credit for taking steps to improve its operations, such as changing how sales representatives are paid and stopping the practice of paying health care professionals to speak to doctors about the company’s products.

It also said the Justice Department, which had opened a parallel criminal investigation into the matter, was closing its inquiry without any action against the company.

The civil settlement with GlaxoSmithKline resolves the latest case to emerge from an industrywide sweep that began in 2010.

Since then, a number of other companies, including Novartis and AstraZeneca, have settled similar charges with the S.E.C.

In the case of GlaxoSmithKline, the commission accused the company’s China-based subsidiary and a China-based joint venture of violating internal controls and record-keeping provisions of the Foreign Corrupt Practices Act.

From 2010 through June 2013, the company’s employees and agents bribed officials to bolster sales through increases in prescriptions and purchases by hospitals, the S.E.C. said.

The payments included gifts, travel, shopping excursions and cash, it added.

“The costs associated with these payments were recorded in GSK’s books and records as legitimate business expenses, such as medical association sponsorships, employee expenses, conferences, speaker fees and marketing costs,” the statement said.

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