Post by mnholdem on Sept 6, 2018 7:01:38 GMT -5
MnHoldem Note: This article is not directly related to MannKind Corporation, but illustrates that some global pharmaceutical companies have been engaging in corrupt/illegal practices to create an uneven playing field for competitors.
Corruption in Pharma: Sanofi Only the Latest Company Accused of Bribery
Published: Sep 06, 2018 By Mark Terry
Excerpt:
Paris-based Sanofi settled corruption charges with the U.S. Securities and Exchange Commission (SEC) for more than $25 million.
The charges were that Sanofi subsidiaries in Kazakhstan and the Middle East made corrupt payments in order to win business. Sanofi did not admit or deny the findings, but agree to pay $17.5 million in disgorgement, $2.7 million in prejudgment interest and a civil penalty of $5 million.
The charges were violations of the U.S. Foreign Corrupt Practices Act. Sanofi stated, “The settlement relates to an investigation by the SEC and U.S. Department of Justice (DOJ) of certain local activities outside the United States and France, namely, in Kazakhstan, Jordan, Lebanon, Bahrain, Kuwait, Qatar, Yemen, Oman, the United Arab Emirates and the Palestinian territory during the period 2006 to 2015. As part of the settlement, the company neither admits nor denies it engaged in any wrongdoing.”
It will pay $25,206,145 in total and also agreed to a two-year self-reporting period on the effectiveness of its enhanced internal controls and anti-bribery and corruption compliance program.
The SEC states, “The schemes spanned multiple countries and involved bribe payments to government procurement officials and healthcare providers in order to be awarded tenders and to increase prescriptions of its products. In Kazakhstan, distributors were used as part of a kickback scheme to generate funds from which bribes were paid to officials to ensure that Sanofi was awarded tenders at public institutions. The kickbacks were tracked in internal spreadsheets where they were coded as ‘marzipans.’ In the Middle East, various pay-to-prescribe schemes were used to induce healthcare providers to increase their prescriptions of Sanofi products.”
Charles Cain, FCPA Unit Chief, SEC Enforcement Division, stated, “Bribery in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally. While bribery risk can impact any industry, this matter illustrates that more work needs to be done to address the particular risks posed in the pharmaceutical industry.”
The most notorious case of a biopharma bribery scandal was GlaxoSmithKline in China. In September 2014, a southern China court fined GSK almost $500 million on charges of bribery. The Changsha Intermediate People’s Court also sentenced Mark Reilly, formerly GSK’s China general manager, and four other company managers, to prison terms.
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Regarding the news of Sanofi settlement, Sanofi’s chief executive officer, Olivier Brandicourt, stated, “Sanofi requires all our employees to act with integrity and to follow the highest standards of conduct. We have worked diligently to strengthen our compliance program worldwide and we are pleased the DOJ and SEC recognized these efforts and our close cooperation. We will continue to strengthen internal controls, anti-bribery and corruption compliance programs, and our oversight and training of teams worldwide. Conducting our activities in an ethical way is something that our company takes very seriously.”
