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British executive accused in China drug bribery

By WTOP Staff

DIDI TANG
Associated Press

BEIJING (AP) — Chinese police Wednesday accused a British executive of GlaxoSmithKline of leading a sprawling scheme to bribe doctors and hospitals to use its drugs.

The announcement was the first time a foreign employee in China of British-based GSK was accused in the investigation announced last July. It highlighted the widespread use of payments to doctors and hospitals by sellers of drugs and medical equipment in a poorly funded health system that Chinese leaders have promised to improve.

The executive, Mark Reilly, is accused of operating a “massive bribery network,” said a police official, Gao Feng, at a news conference. He said the case had been handed over to prosecutors for formal indictment.

Beginning in January 2009, Reilly is accused of ordering his sales team to pay doctors, hospital officials and health institutions to use GSK’s products, said Gao, deputy director of the Ministry of Public Security’s economic crimes unit. He said that resulted in “illegal revenue” of billions of yuan (hundreds of millions of dollars).

“GSK’s bribery activities ran through its entire operations in China,” Gao said.

Gao said Reilly is in China but gave no other details of his status. He said dozens of other people also were implicated but gave no names or other details.

The British Embassy in Beijing said diplomats were in regular contact with Reilly and were providing “consular assistance.” The embassy declined to comment further while the case was under way.

Reilly was GSK’s senior vice president of pharmaceuticals for China and Hong Kong and former general manager for China.

“We take the allegations that have been raised very seriously. They are deeply concerning to us and contrary to the values of GSK,” the company said in a statement. “We want to reach a resolution that will enable the company to continue to make an important contribution to the health and welfare of China and its citizens.”

Police previously identified four Chinese employees of GSK who they said confessed to bribery.

A second foreign drugmaker, AstraZeneca, said in July that police in Shanghai were investigating one of its salespeople. The company has given no information since then.

Chinese state media have publicized the bribery investigations of GSK and AstraZeneca. But economists who study Chinese health care say such payments are more widely used by China’s domestic drug manufacturers.

Doctors and hospitals routinely accept informal payments from patients and suppliers of medical goods to top up low salaries and cover gaps in budgets.

Hospitals also raise money by adding surcharges to drug prices and assigning employees sales quotas. That can also distort treatment by encouraging overuse of expensive drugs or procedures.

Gao said Reilly used bribery to meet sales targets set by GSK’s head office.

The company charged prices up to seven times the level charged in other countries, Gao said. He said that before a patent on one of its drugs was due to expire in 2012, GSK paid bribes to discourage hospitals from switching to cheaper generic versions.

“The more it bribed, the more drugs it could sell,” he said.

GSK employees obstructed previous inquiries by bribing investigators and other government officials, Gao said.

In a separate statement, police in the central city of Changsha, where the investigation began, said Reilly and two Chinese executives also are accused of bribing government officials in Beijing and Shanghai.

On Wednesday, Chinese employees of GSK were shown on state television accusing Reilly of organizing bribery.

“Mark Reilly wanted to maximize the company’s profits,” said one of the employees, Cheng Hongbo. “A lot of money was invested in influencing doctors that have power to prescribe for patients.”

Another employee, Zhang Guowei, said the drug maker “mobilized our connections and bribed officials” to influence the latest investigation. He said Reilly told subordinates to “go ahead” when he was told bribes were needed.

“Mark Reilly proposed to hide or destroy evidence of commercial bribery,” said Zhao.

Police in Changsha said last July that employees appeared to be trying to evade GSK’s internal anti-bribery controls by making payments totaling as much as 3 billion yuan ($490 million) to a travel agency that gave back at least part of that money.

GSK gave its “full assistance and cooperation” to the investigation, Gao said.

___

AP Writer Gillian Wong in Beijing contributed.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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