US investigations covered serious misconduct across 11 countries
Pfizer has been fined $60m after its local affiliates bribed doctors and other health care professionals in order to win business.
Charges against the company were brought the US Department of Justice and Securities (DoJ) and Exchange Commission (SEC) under the Foreign Corrupt Practices Act (FCPA).
The joint DoJ-SEC investigation, which compiled a lengthy series of misconduct charges by the company’s local affiliates in 11 countries, comes less than three years after the DoJ fined Pfizer a record $2.3bn for illegal off-label marketing in the US.
The charge sheet included making improper payments to foreign officials to obtain regulatory and formulary approvals to increase sales in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia.
The SEC said Pfizer’s employees and agents then tried to conceal the bribery by recording them as legitimate expenses for activities like marketing, training, travel and entertainment.
In China, for example, Pfizer employees invited ‘high-prescribing doctors’ to club-like meetings with extensive recreational and entertainment activities to reward doctors’ past product sales or prescriptions.
Pfizer China also created ‘point programmes’ that saw government doctors collect points based on the number of Pfizer prescriptions they wrote. The points were then redeemed for various gifts ranging from medical books to cell phones, tea sets, and reading glasses.
Kara Brockmeyer, chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act Unit, said: “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.
“These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations.”
The SEC, which said the misconduct dated back as far as 2001, also charged Wyeth, which Pfizer acquired in 2009, with further FCPA violations.
These included bribing doctors in China, Indonesia and Pakistan to recommend Wyeth nutritional products in return for cash payments or incentives such as BlackBerrys.
But, the SEC noted, Pfizer made an initial voluntary disclosure of misconduct by its subsidiaries to the SEC and Department of Justice in October 2004, and fully cooperated with SEC investigators.
The company then took extensive remedial actions, such as undertaking a comprehensive worldwide review of its compliance programme, investigators said.
Pfizer also voluntarily reported the findings of its risk-based FCPA due diligence review of Wyeth’s global operations to the SEC staff.
Amy Schulman, executive vice president and general counsel for Pfizer, said: “The actions which led to this resolution were disappointing, but the openness and speed with which Pfizer voluntarily disclosed and addressed them reflects our true culture and the real value we place on integrity and meeting commitments.”
The company may not be the only one in pharma to fall foul of the Foreign Corrupt Practices Act after it emerged earlier this week that Israeli company Teva is being investigated by the SEC over allegations of bribery in Latin America.