Updated on 9 August 2012
The SEC stated that the company tried to conceal bribery by improperly recording transactions in accounting records
Mumbai: The Securities and Exchange Commission (SEC) of the US government recently charged Pfizer with violating the Foreign Corrupt Practices Act (FCPA). Pfizer has been ordered to pay a total of $60million in damages after its subsidiaries bribed doctors and other healthcare professionals, employed by foreign governments in order to win business.
The SEC alleged that employees and agents of Pfizer's subsidiaries in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia made improper payments to foreign officials to obtain regulatory approvals, sales, and increased prescriptions for the company's pharmaceutical products. The SEC stated that they tried to conceal the bribery by improperly recording the transactions in accounting records as legitimate expenses for promotional activities, marketing, training, travel and entertainment, clinical trials, freight, conferences, and advertising.
Additionally, the SEC separately charged another pharmaceutical company that Pfizer acquired a few years ago, Wyeth LLC, with its own FCPA violations. Pfizer and Wyeth agreed to separate settlements in which they will pay more than $45 million combined to settle their respective charges. In a parallel action, the Department of Justice announced that Pfizer HCP Corporation agreed to pay a $15 million penalty to resolve its investigation of FCPA violations.
"Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers," said Kara Brockmeyer, chief of the SEC Enforcement Division's Foreign Corrupt Practices Act Unit. "These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations."
According to the SEC's complaint against Pfizer filed in U.S. District Court for the District of Columbia, the misconduct dates back as far as 2001. Employees of Pfizer's subsidiaries authorized and made cash payments and provided other incentives to bribe government doctors to utilize Pfizer products.