Glaxo Sees Return to Growth in China Next Year After State Probe

GlaxoSmithKline Plc expects its China business to return to growth after a two-year sales slump triggered by a government investigation that cost it a record 3-billion-yuan ($479 million) fine last September.

The London-based drugmaker has cut the number of local sales representatives to 3,000 from 5,000, Glaxo’s China head Herve Gisserot said in interviews with Reuters and the Financial Times. Ross Wilkie, a spokesman, confirmed the comments via e-mail.

The Chinese government opened a probe into Glaxo’s sales practices in 2013. The company said last September that judicial authorities had found it guilty of bribing non-government personnel and that it “fully accepts the facts and evidence” of the investigation. Glaxo published an apology to the government at the time and pledged to overhaul its practices.

Sales of the company’s medicines and vaccines in China swung from growth of 17 percent in 2012 to a drop of 18 percent the following year, according to Glaxo’s annual reports. They fell one percent last year.

Glaxo fired about 110 employees in China last March for misconduct that occurred more than 18 months earlier, people with knowledge of the matter said at the time. The company said in a statement at the time that it has increased monitoring of expense claims and engaged an independent legal firm and external consultants to review its operations in China.

— With assistance by Hui Li

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