GlaxoSmithKline In China CaseAnalysis
GlaxoSmithK in China: Case Analysis
Abubakarr S. Jalloh (A.J)
University of Maryland University College
AMBA 660.9040
January 23, 2015
Professor Mohamed Ezz, MD
Joseph Nathan was a businessman in New Zeeland who conducted business on mainly imports and exports. In 1904, Joseph attained the rights to produce dried up milk which was later sold as baby food called Glaxo. GlaxoSmithKline got its name in the early 1990’s after Glaxo a pharmaceutical firm created in New Zeeland merged with SmithKline, which was also a Pharmaceutical, firm in the United Kingdom. Several years after the merger, GlaxoSmithKline (GSK) became one of the largest drug manufacturers around, with an estimate of $22.5 billion in global sales and had over one hundred thousand employees worldwide (Quelch & Rodriguez, 2013). With GSK being one of the largest manufacturers of pharmaceuticals, they have different sites around the world. One of their sites is in China after China joint the World trade organization (WTO). The Chinese people did not like to use western medicine because they felt like it came with too much side effects. Prior to China joining the WTO, the pharmaceutical industry was at an all time high with less foreign interaction but China’s pharmaceutical division wanted to grow outside of China which is one of the reasons China joined the World Trade Organization. Although GSK had laid some sort of groundwork in China, which was mainly through acquisition of other firms, they wanted to be more of a factor in the pharmaceutical sector in china. The problem with GlaxoSmithKline is that they have to find a way to get the Chinese citizens to accept the different pharmaceuticals they manufacture. Due to the fact that the Chinese citizens prefer herbal and traditional treatments rather than western Pharmaceuticals, GSK allegedly were bribing Doctors, hospitals administrators and government officials to change the outlook on western medicine and to increase the
Abubakarr S. Jalloh (A.J)
University of Maryland University College
AMBA 660.9040
January 23, 2015
Professor Mohamed Ezz, MD
Joseph Nathan was a businessman in New Zeeland who conducted business on mainly imports and exports. In 1904, Joseph attained the rights to produce dried up milk which was later sold as baby food called Glaxo. GlaxoSmithKline got its name in the early 1990’s after Glaxo a pharmaceutical firm created in New Zeeland merged with SmithKline, which was also a Pharmaceutical, firm in the United Kingdom. Several years after the merger, GlaxoSmithKline (GSK) became one of the largest drug manufacturers around, with an estimate of $22.5 billion in global sales and had over one hundred thousand employees worldwide (Quelch & Rodriguez, 2013). With GSK being one of the largest manufacturers of pharmaceuticals, they have different sites around the world. One of their sites is in China after China joint the World trade organization (WTO). The Chinese people did not like to use western medicine because they felt like it came with too much side effects. Prior to China joining the WTO, the pharmaceutical industry was at an all time high with less foreign interaction but China’s pharmaceutical division wanted to grow outside of China which is one of the reasons China joined the World Trade Organization. Although GSK had laid some sort of groundwork in China, which was mainly through acquisition of other firms, they wanted to be more of a factor in the pharmaceutical sector in china. The problem with GlaxoSmithKline is that they have to find a way to get the Chinese citizens to accept the different pharmaceuticals they manufacture. Due to the fact that the Chinese citizens prefer herbal and traditional treatments rather than western Pharmaceuticals, GSK allegedly were bribing Doctors, hospitals administrators and government officials to change the outlook on western medicine and to increase the
References: (2012, March). The extraterritorial reach of the fcpa and the uk bribery act: implications for International business. Arnold & Porter Advisory. Retrieved from (http://www.arnoldporter.com/resources/documents/Advisory%20Extraterritorial_Reach_FCPA_and_UK_Bribery%20Act_Implications_International_Business.pdf). (2012, September). GSK Third Party Code of Conduct. Retrieved from http://www.gsk.com/media/279797/gsk-third-party-code-of-conduct.pdf Quelch, J. & Rodriguez, L. (2013). GlaxoSmithKlein in China (Product No. 9514049 ). Retrieved from http://hbsp.harvard.edu.