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Teva hit with largest-ever fine under US anti-corruption act

Company to pay $519m after promoting Copaxone in Russia, Ukraine and Mexico

Teva building 

Teva has agreed to pay a total of $519m to resolve criminal charges brought by the US government relating to the promotion of its multiple sclerosis drug Copaxone in Russia, Ukraine and Mexico.

The settlement includes $283m to resolve charges brought under the US Foreign Corrupt Practices Act (FCPA) that Teva was involved in bribery of officials in the three countries to boost sales of Copaxone (glatiramer acetate). The company pleaded guilty to the Russian charges.

Teva also agreed to pay $236m to the US Securities and Exchange Commission in related proceedings, and taken together the two penalties are the largest criminal fine imposed against a pharmaceutical company for violations of the FCPA. 

In a statement, Teva said the resolution 'involves conduct occurring in the past, and none of the employees involved in the improper payments are still employed by Teva, including in Russia where the entire leadership team was replaced in 2013.'

Comprehensive details of Teva's activities are published on the Department of Justice website. In Russia, Teva employees paid bribes to a high-ranking Russian government official to increase Copaxone sales. The DoJ says Teva made more than $200m in profits on Copaxone sales to the Russian government, while the unnamed official earned approximately $65m in corrupt profits.

'Teva also admitted to paying bribes to a senior government official within the Ukrainian Ministry of Health,' according to the DoJ, which said that activity was intended to promote both Copaxone and insulin products. 

It adds that the company also 'admitted that it failed to implement an adequate system of internal accounting controls and failed to enforce the controls it had in place at its Mexican subsidiary'.

The company said its Mexican subsidiary had been bribing doctors to prescribe Copaxone since at least 2005.

Teva CEO Erez Vigodman said that 'while the conduct that resulted in this investigation ended several years ago, it is both regrettable and unacceptable, and we are pleased to finally put this matter behind us'.

Article by
Phil Taylor

23rd December 2016

From: Research

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