In another instance in which a drugmaker appears to have bribed overseas officials, Pfizer has "voluntarily" provided the US Department of Justice and the US Securities and Exchange Commission with information concerning "potentially improper payments" made by Pfizer and Wyeth personnel in connection with certain unspecified sales activities outside the US.
The move comes amid increased scrutiny by the feds into the pharmaceutical industry and its interactions with foreign health care systems. In late 2009, the head of the Justice Department’s Criminal Division warned drugmakers that there will be more criminal enforcement against interactions with foreign officials as they seek violations of the Foreign Corrupt Practices Act (see here).
In April, Johnson & Johnson was fined $70 million for bribing public doctors in several European countries - and paying kickbacks to Iraq - to illegally obtain business (read this). And over the past year, at least five other drugmakers, including Merck and Eli Lilly, received letters as the feds seeks to uncover any FCPA violations. The probe is also exploring whether drugmakers and clinical trial organizations pay off third-party investigators to finesse research data (look here).
The Pfizer submission was disclosed in a filing with the SEC and notes that the drugmaker is in "discussions" with the DOJ and SEC about a resolution (see page 33). The filing goes on to say that improper payments and "other matters" are being investigated by authorities in various foreign countries, including a civil and criminal investigation in Germany over tax matters involving a Pfizer subsidiary.
bribe pic thx to donhankins on flickr
5 Comments
THe feds must of convinced Pfizer was already had or Pfizer would never admit to it even if they knew all about it, I'm surprised India is not involved. They are even more lax in enforcing regulations and company policy over seas than they are in the U.S.A. though it is hard to believe one could ignore the law any more than Pfizer does. Of course when you have the most corrupt legal officers of any corporation in America or at least the reputation of the most corrupt, then one could see how matters get so far out of hand.
What abo0ut the compliance agreement that this violates. Is there no penalty for repeatedly violating the compliance agreements?
I have seen a penalty yet for violating complaince agreements. However, I think they are getting closer to going after exec's who know all about the illegal activity like Kindler did of Pfizer.
Illegal activity started well before Kindler and included Steere, McKinnell, Read, and others (e.g. Katen), in their prior as well as their peak positions. It is at the core of some (predictable) market operations and has thus been aggressively protected.
That is sooo bad