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Teva facing bribery probe by SEC

US authorities are investigating the pharma company's activities in Latin America

Teva has become the latest pharma company to come under scrutiny by the US Securities & Exchange Commission (SEC) over allegations of bribery.

The Israeli company disclosed that the SEC is looking into its business practices in Latin America under the auspices of the Foreign Corrupt Practices Act (FCPA), which was introduced to prevent companies from gaining competitive advantage by offering inducements to officials of foreign governments.

Teva said the SEC has subpoenaed documents related to its activities in Latin America and that the investigation is in its early stages. It has also started its own internal probe into the matter.

This is the latest in a series of FCPA-related investigations into pharmaceutical industry activities by the SEC, which has focused on the payment of bribes in return for preferential treatment such as the inclusion of products on formularies or the favourable interpretation of clinical data. 

Last November, Pfizer agreed to pay $60m to settle allegations that it paid kickbacks in order to encourage uptake of its products outside the US, including sales activities undertaken by Wyeth which it acquired for $68bn in 2009.

Meanwhile earlier in 2011 Johnson & Johnson paid around $80m in settlement of charges it paid inducements to doctors in Europe to prescribe certain medical devices and pharmaceutical products.

Other companies that have been under scrutiny by the SEC for overseas practices include Merck & Co, AstraZeneca, Bristol-Myers Squibb and GlaxoSmithKline.

In its second-quarter results filing, Teva said that it received notification of the probe on July 9 and "is cooperating with the government". It also said it had engaged independent counsel to assist in its investigation.

7th August 2012

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