GlaxoSmithKline Case Study

Agency/Agencies

Guangzhou City Public Security Bureau, Social Order Team; Shantou City Public Security Bureau, Social Order Section

Case

Infringement Situation:

1) On Dec 20th 2000, Belgium Customs seized 57,600 packs of HALFAN, 4,400 packs of AMPICLOX and 11,000 packs of AMOXIL on their way to Nigeria via Belgium. GSK's test proved the above drugs to be counterfeit.

2) The drug "HALFAN," produced by GSK, is a capsule-shaped tablet antimalarial drug for human use, containing mainly HaIofantrine. In the second half of year 2000, Wang Jiuwan, a former employee of Hubei Province Medical and Health Care Products Import & Export Corp, received an order from Austin, a Nigerian doing business between Nigeria and China, and provided counterf8it HALFAN samples and HALFAN packing samples to Hu Fengnian. Hu Fengnian then arranged the production of counterfeit HALFAN in Qingdao City YI LI Pharmaceutical Company, where he worked then. Hu also arranged Li Shipeng to produce HALFAN packages and instruction leaflets in Jimo City HUA TIAN Package Printing Factory, where Li worked then. After that. Wang Jiuwang arranged the export of count6rfeit HALFAN to Nigeria based upon the order placed by Austin. The counterfeit HALFAN mentioned above was seized by Belgium Customs, and GSK's test showed that the seized HALFAN contained not HaIofantrine but Sulfadoxine.

3) AMPICLOX and AMOXIL' AMPICLOX and AMOXIL produced by GSK are antibiotic drugs for human use. Since July 2000, suspects Wu Lang, Chen Longmao, Deng Jun, and Liang Zhongyan (all were former employees of Guangdong Medical and Health Care Products Import & Export Corp.) decided together to organize the production and export of drugs on a large scale by exploiting the export rights of Shantou City SHENG PING Technical Development Corp. The production and export of counterfeit AMPlCLOX and AMOXIL seized by Belgium Customs were organized by the four suspects. On March 8th 2001, Shantou PSB caught the gang preparing to export a total of 2,675 master cases (weighing approximat8Iy 43 tons) of counterfeit drugs involving 17 brands belonging to 7 major international pharmaceutical companies. Suspects Wu Lang and Cheng Hongmao were apprehended at the sit6.

Enforcement Status:

1) HALFAN: On Dec 26th 2000, upon the complaint filed by GSK, Guangzhou City PSB inspeCt6d Hubei Medical and Health Care Products Import & Export Corp and found that the export of counterf6it HALFAN was upon orders placed by Austin, a Nigerian located in Guangzhou City. On February 18th 2001, Guangzhou PSB detained Austin and inspected Austin's office. After that, officers from Guangzhou PSB traveled to Wuhan City, Hubei Province, and Qingdao City and Jimo City, Shandong Province, for in-depth investigation and successfully apprehended Hu Fengnian and Li Shipeng. However, Wang Jiuwan, one of the main suspects, escaped. On April 30th, the three suspects were approved to be arrested by the Guangzhou PP. On April 4^th 2002, public prosecution was initiated. On September 20th, the Guangzhou Medium People's Court issued a judgment. (Please find attachment 1 for case briefing.)

2) AMPlCLOX and AMOXIL: Shipping documents indicat6d the count6rfeit drugs originated from Thailand. However, the Thai authorities' investigation found the drugs were actuality exported from Shantou City, China. On March 8th 2001, GSK was informed that the suspects who were responsible for counterf6it drugs seized in BeIgium were preparing export a new batch of count6rfeit drugs in Shantou and reported it to Shantou PSB. Shantou PSB carried out a raid and seized 2,675 master cases of counterfeit drugs involving 17 different brands belonging to seven international pharmaceutical companies. PSB filed the case and carried out an in-depth investigation. It was discovered that since July 2000, suspects Wu Lang, Chen Hongmao, Deng Jun, and Liang Zhongyan had jointly organized the production of counterfeit foreign brands drugs at large scale in more than 6 pharmaceutical factories located in 4 different provinces. The suspects had then exported the drugs to Nigeria by using the export license of Shantou City SHENG PING Technical Development Corp. Besides AMPlCLOX and AMOXIL, the gang counterf6ited more than 17 foreign branded drugs belonging to more than seven different international pharmaceutical companies in large volumes. On June 10th 2001, Shantou City Longhu District PP initiated public prosecution and on July 22nd, the Longhu District Peoples Court reached a judgment. (See attachment "case briefing" for details.)

3) On October 15th, 2002, under the supervision of PSB officials from both Shantou PSB and Guangdong Provincial PSB, the 57,600 seized mast6r cases of counterf6it drugs were destroyed in an environmentally friendly way at Zhuhai City Garbage Plant.

Date filed

December 2000

Results

Hu Fengning, responsible for the production of count6rf6it HALFAN, was sent6nced to  year and 9 months of fixed-term imprisonment and fined RMB20,000. Li Shipeng, responsible for the production of count6rfeit HALFAN packages, was sentenced 1 and half year fixed-term imprisonment and fined RMB15,000. Austin, responsible for dealing counterfeit HALFAN, against whom the Guangzhou PP withdrew their prosecution on September 17th due to new developments in the case, is currently held in the Gaungzhou Detention Center. Wu Lang was sentenced to 2 years fixed-term imprisonment and fined RMB80,000. Chen Hongmao was sent6nced to 2.5 years fixed-t6rm imprisonment and fined RMB10,000.

Why is this case unique?

1) The count6rfeit drug involved in this case was intended for export only, not for domestic sale; the counterfeit drug was seized outside China; after being informed by Belgian authorities, the Chinese authorities opened the criminal case immediately timely and carried out a thorough investigation.

2) The case involved a foreign suspect violating Chinese law, suspects Located in several provinces and large amounts of illegal turnover; therefore, it has drawn great attention from the MPS and was classified as one of the nine major cases under the direct supervision and guidance of the MPS in 2001.

3) Many enforcement authorities, including TSB and PSB at both provincial and city Levels participated in the investigation and worked together to solve the case.

4) A thorough investigation was conducted, from the dealer to the manufacturer, including printer; all parties involved in this count6rfeit drug manufacture and traffic were discovered.

5) When the case was closed, all the seized counterf6it drugs were destroyed in an environmentaIIy friendly manner.