Foreign subsidiaries of Pfizer spent years bribing foreign doctors and healthcare officials to expand sales of the company’s pharmaceuticals, according to a $60 million settlement reached with the U.S. government.

 

The deal, brokered by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice, resolves charges of illegal activities that took place in about a dozen countries, including China, Bulgaria, Croatia, Kazakhstan, and Russia.

 

“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,” Kara Brockmeyer, an SEC official, said in a news release. “These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations.”

 

In China, a subsidiary awarded doctors with points for every Pfizer prescription they wrote, allowing them to redeem the points for medical books, cell phones, and other gifts. In some cases, Pfizer’s China operation bribed physicians with free trips abroad.

 

Pfizer officials in the U.S. reportedly learned of the bribes in 2004 and began in internal investigation that kept federal regulators in the loop on what they discovered. The company insisted its executives knew nothing about the schemes before then.

-Noel Brinkerhoff

 

To Learn More:

Pfizer Agrees to Pay $60M to Settle Foreign Bribery Case with U.S. (by Dina ElBoghdady, Washington Post)

Pfizer Settles U.S. Charges of Bribing Doctors Abroad (by Katie Thomas, New York Times)

SEC Charges Pfizer with FCPA Violations (U.S. Securities and Exchange Commission)

Drug Companies Find it Cost-Effective to Pay Fines and Keep Breaking Laws (by David Wallechinsky, AllGov)