Pfizer will pay $60 million to settle US bribery probes

Pfizer to pay $60 million to settle US bribery probes
Last Updated:August 07, 2012 17:11

Pfizer stated on Tuesday that it will pay $60 million to settle US investigations into allegations its employees bribed health and government officials in Europe and Asia to win business and increase sales. Mythili Raman, principal deputy assistant attorney general of the Department of Justice’s criminal division, said the drugmaker “took short cuts to boost its business in several Eurasian countries, bribing government officials…to the tune of millions of dollars.”

As part of the settlement, Pfizer will pay a penalty of $15 million under an agreement with the Department of Justice to resolve an investigation of Foreign Corrupt Practices Act (FCPA) violations, as well as disgorge $26.3 million in profits and prejudgment interest in relation to a civil settlement with the Securities and Exchange Commission. According to the Justice Department, Pfizer’s units were accused of violating the FCPA in connection with allegedly improper payments made to government officials in Bulgaria, Croatia, Kazakhstan and Russia. The company “sought to improperly influence government decisions in these countries regarding the approval and registration of Pfizer products, the award of pharmaceutical tenders and the level of sales of Pfizer products,” the Justice Department said.

In a separate agreement, the company’s Wyeth unit, which Pfizer acquired in 2009, will pay $18.8 million in disgorgement of profits to resolve a civil settlement with the SEC regarding “certain improper payments” in the operations of four subsidiaries outside the US. The SEC civil settlement covers conduct in China, Russia, Italy, and some Eastern European countries. In addition, Pfizer said that its post-acquisition due diligence review of Wyeth identified other improper payments in China, Saudi Arabia, Indonesia and Pakistan, which the company “voluntarily disclosed…to the US government.” Kara Brockmeyer, who heads the SEC’s foreign enforcement division, said “Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programmes to improperly reward foreign officials who proved to be their best customers.”

The drugmaker first disclosed the misconduct to the SEC and Justice Department officials in October 2004, and has neither admitted nor denied the allegations. However, Raman noted that “Pfizer made “significant efforts…to eliminate such improper practices, not only by implementing compliance reforms, but also by assisting US authorities.” Amy Schulman, general counsel for the drugmaker, stated that “the actions which led to this resolution were disappointing, but the openness and speed with which Pfizer voluntarily disclosed and addressed them reflects our true culture.”

 Pfizer pays $60m to US government to settle charges - (BBC News) Pfizer Agrees to Settle Foreign Bribery Case With U.S. - (Bloomberg)

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