Pfizer faces DOJ, SEC foreign bribery probes for China, Russia operations

Pfizer sign
The anti-corruption units at the U.S. Securities and Exchange Commission and the Department of Justice have sent Pfizer requests for documents relating to its operations in China and Russia. (Tracy Staton)

Big Pharma's operations abroad are a common punching bag for U.S. anti-corruption watchdogs, which have snared a series of high-profile settlements in recent years. Now, Pfizer will take its turn under those watchdogs' withering eyes for its business in Russia and China. 

The foreign corruption units at the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are looking into Pfizer's activities in China and Russia, the drugmaker said in a quarterly securities filing (PDF). 

The requests from the two agencies on China came recently in June and August, while the Russian ones arrived last year and have been disclosed in previous reports. “We are producing records pursuant to these requests,” Pfizer said in the document.

Both probes fall under the Foreign Corrupt Practices Act (FCPA), which forbids U.S. firms and individuals from bribing foreign government officials to benefit their businesses.

Pfizer knows too well what that law means. In August 2012, the company agreed to pay over $60 million to settle charges by the DOJ and SEC for allegedly violating the FCPA. At the time, the company was accused of paying foreign officials to facilitate drug and formulary approvals, as well as increasing sales in eight countries including China and Russia.

RELATED: Novartis inks settlements worth $347M with DOJ, SEC over foreign doctor payments, records keeping

In China, for example, Pfizer invited “high-prescribing doctors” in the Chinese government system to fancy meetings that included recreational activities. Various point programs were created, under which government doctors could accumulate points to redeem gifts, according to the SEC’s complaint back then.

Pfizer’s not the only pharma company to have been targeted by the agencies under FCPA—and China and Russia have been frequently cited as crime scenes. In June, Novartis coughed up $347 million to wrap up years of FCPA investigations around its conduct in Greece, Vietnam, South Korea and China.

RELATED: Bristol-Myers scraps doc payments in China after last fall's FCPA settlement

Alexion in July paid $21 million to resolve foreign corruption charges relating to how it tried to win favorable treatment for its Soliris in Turkey and Russia. In 2015, Bristol Myers Squibb shelled out $14 million to settle the SEC’s finding that its China sales reps reaped over $11 million in profits by bribing healthcare providers. There’s also the infamous GlaxoSmithKline China bribery case, which ended with a big $490 million fine by Chinese authorities in 2014 and $20 million in a settlement by the SEC in 2016.

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