Merck (NYSE: MRK) has been roped into a federal probe of pharma's foreign operations. The Justice Department and Securities and Exchange Commission are investigating the drugmaker for Foreign Corrupt Practices Act violations, Merck says in an SEC filing. The feds asked Merck for info on its businesses in "a number of countries," the company adds.
"The Company is cooperating with the agencies in their requests and believes that this inquiry is part of a broader review of pharmaceutical industry practices in foreign countries," the filing states.
And in that, Merck would be correct. As Dow Jones reports, Eli Lilly disclosed a similar investigation earlier this year. Plus, Main Justice writes, the DOJ and the SEC have sent letters to AstraZeneca, Baxter, and Bristol-Myers Squibb seeking info on possible FCPA infractions. The agencies are examining drugmakers' practices in a host of countries, including Brazil, China, Russia and Saudi Arabia.
The probes should come as no surprise to Big Pharma. Lanny Breuer, the Justice Department's Criminal Division chief, said in a November speech that the drug industry would be coming under increased scrutiny for FCPA violations. The aim, Main Justice says, is to rein in kickbacks and bribes paid by U.S. companies overseas.