Call it gilding the Lilly. For nearly two decades, the Indianapolis-based Eli Lilly ($LLY) is believed to have forked over bribes to officials in countries like China, Russia and Brazil. In return it pocketed millions of dollars worth of business. Now it will pay up again, but this time to the U.S. government.
The company has agreed to ante up $29.4 million to settle Securities and Exchange Commission claims that it funneled money through "offshore marketing agreements" that was then used by employees in subsidiaries to pay off government officials, Bloomberg reports. As these things go, Lilly did not acknowledge violating the Foreign Corrupt Practices Act. SEC officials, however, said the company didn't try very hard to check out how certain money was being used.
"Companies can't simply rely on paper-thin assurances by employees, distributors or customers," said Kara Novaco Brockmeyer, who leads the SEC's foreign bribery unit.
Of course, Lilly is not the only drugmaker to be accused of taking the bribery route to get business. Pfizer ($PFE) and two of its units in August reached separate agreements and agreed to pay a total of $60.2 million to settle charges that they paid off doctors in the Middle East and Eastern Europe to get business. Johnson & Johnson ($JNJ) has already agreed to pay $70 million for similar accusations. Teva Pharmaceutical Industries ($TEVA), GlaxoSmithKline ($GSK), Baxter ($BAX) and a host of other companies have indicated that they have been contacted by federal investigators.
- read the Bloomberg story