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GSK says past R&D shortfalls in China now fixed

The GlaxoSmithKline building is pictured in Hounslow, west London June 18, 2013. REUTERS/Luke MacGregor
The GlaxoSmithKline building is pictured in Hounslow, west London June 18, 2013. REUTERS/Luke MacGregor

LONDON (Reuters) - GlaxoSmithKline said on Tuesday it had faced problems with drug research in China in the past but these shortcomings had now been fixed, following internal changes and the sacking of its China R&D head in June.

Britain's biggest drugmaker, which is facing charges of corrupt sales practices in China, said a 2011 internal audit into its Shanghai research and development (R&D) center had highlighted a number of deficiencies.

However, a follow-up audit a year later had awarded the highest possible rating to the company's Chinese research facility, where neurology drugs are developed, a company spokesman said.

Last month GSK dismissed its R&D head in China, Jiangwu Zang, after discovering that a scientific study by some Chinese staff contained a misrepresentation of data. The results of the study, involving an experimental multiple sclerosis treatment, were written up and published in the journal Nature Medicine, prompting GSK to seek a retraction of the paper.

Although this episode was not related to the 2011 R&D audit, GSK said it underlined its readiness to take prompt action when there were problems.

"Where we find that systems or controls need to be strengthened, or individual misconduct has occurred, we take the appropriate corrective action or disciplinary action as quickly and decisively as possible", the spokesman said.

The problems from two years back at GSK's Shanghai research center were highlighted on Tuesday by the New York Times, which said it had received a confidential document from November 2011 detailing faults discovered at the time.

GSK's head of emerging markets, Abbas Hussain, said on Monday that some of its executives in China appeared to have broken the law in the bribery scandal and he promised changes to lower the cost of medicine in the country.

GSK's chief executive, Andrew Witty, is expected to address the company's problems in China when he presents second-quarter results at 1100 GMT on Wednesday.

(Reporting by Ben Hirschler; Editing by Greg Mahlich)

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