It turns out the corruption probe in China wasn't Sanofi's only recent bribery investigation. A German court convicted two former employees of bribery 10 months ago and slapped the French drugmaker with a €28 million ($39 million) fine--news that's just now coming to light thanks to a simplified German legal process that allows courts to try some crimes without a courtroom trial.
According to Reuters, a Sanofi ($SNY) spokesman said an investigation of the former employees found that between 2007 and 2010 they had bribed a consultancy that advised one of the company's clients--a pharmaceuticals dealer--in order to win more orders from that client. "Sanofi was unfairly given preference because of this," he told the news service.
A spokesman for prosecutors in Verden, Germany, told Reuters that further investigations are ongoing, but he wouldn't specify whether the investigations related to Sanofi or to its employees. He declined to provide Reuters with details on the identity of the client or the consultant, though he did say that both employees worked with the company's sales force and neither was a senior manager. The court doled out their suspended sentences for bribery transactions in business last May.
That timeline puts the convictions just before Chinese bribery allegations erupted in the pharma world last summer. After authorities in China targeted GlaxoSmithKline ($GSK) for funneling $490 million to Chinese doctors through travel agencies, whistleblower accusations radiated outward to ensnare several multinational drugmakers--including Sanofi. The company allegedly paid ¥1.7 million ($277,000) in bribes to 503 doctors around the country, forking over ¥80 to doctors each time a patient bought its products.
Corruption allegations have ensnared pharma companies around the world. A few years back, Sanofi was one of a handful of international companies entangled in a bribery investigation in Serbia, which highlighted the dangers of emerging markets expansion. More recently, Teva Pharmaceutical Industries ($TEVA) said in November that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
But drugmakers' home countries have come down hard, too. Penalties from Britain's Serious Fraud Office may be on the way for Glaxo over its actions in China, some say. And U.S. officials have stepped up their Foreign Corrupt Practices Act enforcement, with Pfizer ($PFE) and Johnson & Johnson ($JNJ), to name a couple, settling probes for $60 million and $70 million, respectively.
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