While other countries are scrambling to understand if they have exposure to a Chinese probe into bribery, Teva Pharmaceutical Industries ($TEVA) says it has found it has similar issues elsewhere. The Israeli drugmaker said in a securities filing that its own investigation has turned up suspect practices in Latin America, Eastern Europe and Russia.
Teva reported in its quarterly report Thursday that it may have violated the U.S. Foreign Corrupt Practices Act (FCPA) and perhaps local laws and could face fines, lawsuits and criminal actions. It said it turned all of the information over to the Securities and Exchange Commission (SEC) and the Department of Justice in the U.S.
The drugmaker started the probe after being asked last year by federal authorities to turn over information that it may have stepped on provisions of the FCPA. It hired a law firm and started its own look. And that turned up evidence of bribery. It said its "operations in the affected countries may be negatively impacted" and that it could face injunctions and "be required to pay material fines." The issue hits the drugmaker in the thick of some turmoil after CEO Jeremy Levin departed this week, reportedly in a fight with the board. The drugmaker Wednesday named CFO Eyal Desheh to take his place on an interim basis.
Teva did not specify in which countries it may be exposed, but it has extensive operations in Russia and Eastern Europe and in 2011 picked up Peruvian drugmaker Corporación Infarmasa as part of a push in that region. In 2011, it also had Russian authorities visiting facilities as part of a probe there into wholesalers.
Meanwhile, GlaxoSmithKline ($GSK) and other drugmakers are still sweating it out in China, where authorities are in the midst of a widespread probe into bribery practices there. It started when a whistleblower led them to GSK, which they say funneled nearly $500 million through travel agencies to bribe doctors and officials to buy its drugs. Other drugmakers have since been dragged into the fray. GSK has said it has talked with U.S. authorities about the allegations in China.
- here's the SEC filing