Serious Fraud Office begins criminal investigation into GlaxoSmithKline's commercial practices

Joel Hills' understanding is that the investigation will seek to establish whether GSK failed to prevent bribery in several countries. Credit: PA

GlaxoSmithKline has confirmed that the Serious Fraud Office has begun a formal criminal investigation into the group’s commercial practices.

The company isn't saying why, the SFO isn't either but my understanding is that the investigation will seek to establish whether GSK failed to prevent bribery in several countries around the world.

We don't know which countries but it would be remarkable if China wasn't one of them.

Last July China accused GSK of spending £285m to encourage doctors to use its medicines in a case that the company's chief executive Sir Andrew Witty later described as "shameful".

Two weeks ago Chinese police announced they had evidence of a "massive bribery network" and planned to press charges against a British executive, the former head of GSK's China operation.

Meanwhile separate allegations of bribery have also surfaced in Poland, Iraq, Jordan and Lebanon. The US authorities are also looking a possible violations of US bribery law.

As its name suggests, the SFO investigates serious and complex cases. Gathering and assessing evidence will take time and it is important to emphasise that it does not necessarily follow that there will be prosecutions.

But clearly there is potentially a lot at stake here. If the law is established to have been broken individuals may end up in court, the company could face hefty fines.

GSK has repeatedly denied that it has a systemic problem with bribery. The company has been co-operating with SFO and the Department of Justice in the US.

Back in December GSK became the first pharmaceutical company to announce it would to stop paying doctors outside the organisation to promote its drugs and cease rewarding its sales representatives based on the number of prescriptions GPs issue - both common practice.