Pfizer near agreement to resolve bribery probe
The U.S. government's Foreign Corrupt Practices Act crackdown rolls on, with Pfizer ($PFE) becoming the latest drugmaker to reach a tentative deal. The company disclosed that it's close to a final agreement with the Securities and Exchange Commission and the Justice Department, which would wrap up a long-running bribery investigation, The Wall Street Journal reports.
The company had previously disclosed that it was under investigation in connection with "potentially improper payments" made by Pfizer and Wyeth ($WYE) units abroad. As such, it's just one of several drugmakers now being scrutinized for possible FCPA violations. The law prohibits payments to "foreign officials" in return for favorable treatment, and because many countries with state-funded healthcare systems consider doctors their employees, some typical industry behavior--right or wrong--could amount to a violation.
In fact, governments are so intertwined with pharma operations abroad that "improper payments" could crop up almost anywhere in the supply chain, U.S. Assistant AG Lanny Breuer has said. "The depth of government involvement in foreign health systems, combined with fierce industry competition and the closed nature of many public formularies, creates, in our view, a significant risk that corrupt payments will infect the process," Breuer said in a speech (as quoted by the FCPA Blog). More recently, DoJ said it was looking into potential payoffs from global drugmakers to researchers handling foreign trials.
In striking a settlement deal, Pfizer would join Johnson & Johnson ($JNJ), which agreed to pay $70 million to resolve FCPA allegations. Eli Lilly is close to a settlement, the WSJ notes, while AstraZeneca ($AZN) says it's working with U.S. officials on its case, but hasn't yet reached an agreement. FCPA Blog reports that GlaxoSmithKline ($GSK), Merck ($MRK), Baxter ($BAX) and Bristol-Myers Squibb ($BMY) have all said that they've received questions from the SEC and Justice about their foreign sales practices.