After Bristol-Myers Squibb Co (NYSE:BMY), GlaxoSmithKline (GSK), Teva (TEVA) and others to follow with FCPA settlements
Several drug companies are being investigated over Foreign Corrupt Practices Act (FCPA) violations. Bristol-Myers Squibb Co (NYSE:BMY) has become the latest among its peers to settle its foreign bribery case with the U.S., but there is more to follow. GlaxoSmithKline plc (ADR) (NYSE:GSK), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Sanofi SA (ADR) (NYSE:SNY) are some other Big Pharma companies that are reportedly being investigated. Others whose foreign practices are said to be under the spotlight are AstraZeneca plc (ADR) (NYSE:AZN), Novartis AG (ADR) (NYSE:NVS) and Eli Lilly and Co (NYSE:LLY). Some of these drug companies are facing repeat FCPA investigations.
Bristol-Myers Squibb Co (NYSE:BMY) reached a $14 million settlement with the U.S. Security and Exchange Commission (SEC). The company was fined for apparently turning a blind eye to irregular marketing practices at its Chinese joint venture called MBS China. According to the SEC, BMY failed to investigate and act on claims that its foreign marketers in China were influencing healthcare providers in the country to win business deals. The bribes came in various forms, including cash payments, travel, conference sponsorships and entertainment. The violations took place between 2009 and 2014, according to U.S. officials.
BMY never acted, despite being tipped about improper foreign practices of its marketing associates in China, and has had to pay millions of dollars to settle FCPA claims against. However, more drug companies could be facing similar or more stringent fines soon or later as U.S. regulators double their efforts to bring FCPA violators to book.
DOJ increases resources of FCPA investigations
It is emerging that the U.S. Department of Justice has increased the resources dedicated to investigating FCPA violations. For example, the number of FBI agents working for the agency in foreign corruption investigations has been increased threefold. The DOJ will initially be focusing on high-impact and potentially high-value cases.
Repeat foreign bribery suspects
GlaxoSmithKline is among the several major drug companies that could sooner or later find themselves paying millions or perhaps billions of dollars to settle foreign bribery claims. The company is being investigated by the U.S. and U.K. regulators over its practices in multiple foreign markets, including China, Lebanon, Poland and Jordan. GSK in 2012 paid $3 billion to settle healthcare fraud claims with the U.S. Again in 2014, the company paid $500 million to China to settle bribery claims in the country. There could be more pain for it on the way.
Teva is also under surveillance by U.S. regulators over FCPA violations. Teva is among the drug companies facing repeat FCPA investigations. The company was last year fined $27.6 million for claims of bribing doctors to use a certain generic drug.
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