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News & Press: Foreign Corrupt Practices Act "FCPA"

Bribery probe is looking at Pfizer

Monday, August 15, 2011   (0 Comments)
Posted by: Wendy Wellman
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Published 08/13/2011 12:00 AM

Justice investigation focuses on 'potentially improper' payments to overseas officials

The U.S. Department of Justice is investigating allegations that pharmaceutical giant Pfizer Inc. may have bribed overseas officials.

Pfizer, which has its world's largest research-and-development site in Groton, said in a regulatory filing late this week that it has voluntarily provided information to the Justice Department and the Securities and Exchange Commission about "potentially improper payments" related to its sales practices outside the United States. Pfizer first revealed the investigation in a February regulatory filing, but it went largely unnoticed at the time.

Revelations about the potentially illegal payments by employees of both Pfizer and Wyeth, which is part of Pfizer, come at a time when the government is cracking down on violations of the Foreign Corrupt Practices Act, which prohibits U.S. companies from bribing foreign officials to garner favor.

"It is possible that criminal charges and substantial fines and/or civil penalties could result from government investigations," according to the quarterly regulatory filing, known as a 10-Q. "We are in discussions with the DOJ and SEC regarding a resolution of these matters."

Pfizer did not say which countries had ongoing investigations over improper payments to government officials, but revealed that both civil and criminal probes are under way in Germany regarding a Pfizer subsidiary's tax filings.

Pfizer is not the only pharmaceutical company that has been investigated recently over bribery of foreign officials.

According to the Dow Jones newswires, Johnson & Johnson earlier this year agreed to pay almost $80 million in fines - $70 million to the United States - over bribery allegations in Europe and indications that it had paid kickbacks to Iraqi officials during the regime of Saddam Hussein. Those allegations involved the sale of medical devices rather than drugs.

Eli Lilly & Co., Bristol Myers-Squibb, Merck & Co. and Baxter Healthcare also have been targeted under the corrupt-practices law, according to the pharmaceutical blog Pharmalot.

Pharmalot said the U.S. probes may look even deeper, exploring the relationships among drug companies, clinical-trial organizations and paid investigators. Drug-trial investigators, many of whom are scientists from overseas, may have been paid in the past to "finesse drug research," according to Pharmalot.

In its most recent filing, Pfizer also noted that several states have indicated they are launching inquiries into the company's marketing of pain drug Lyrica and antibiotic Zyvox. These are the same medications whose illegal promotion was at the center of a Justice Department probe that cost Pfizer $2.3 billion in civil and criminal penalties two years ago.

"We are exploring with the coalition of states various ways to resolve this matter," Pfizer said in its regulatory filing.

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