The Securities and Exchange Commission announced that it had reached a $45 million settlement with Pfizer regarding allegations of bribing doctors in other countries. The allegations date to 2001 and involve violations of the Foreign Corrupt Practices Act, which forbids paying bribes to government officials. Doctors are government employees in many countries. The Justice Department announced that Pfizer H.C.P. Corporation, another subsidiary, had agreed to pay a $15 million penalty to settle similar charges.
The settlements resolve charges that subsidiaries of Pfizer and Wyeth bribed overseas doctors and other health care workers to increase sales of their drugs. S.E.C. enforcement division official Kara Brockmeyer 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.”
Pfizer said in a statement that it had reported the activity to the federal government in 2004 after the discovery of improper payments by employees of a recently acquired Croatian affiliate. A multiyear investigation was conducted, with Pfizer briefing federal officials along the way. Pfizer learned of the improper payments involving Wyeth soon after closing the deal and reported that activity as well. However, in the case of Wyeth, the issues are said to have continued after Pfizer’s acquisition of the company. Pfizer acquired Wyeth in 2009.
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. We expect every colleague across Pfizer to adhere to the highest standards of conduct, and we will continue to hold ourselves and our colleagues accountable for maintaining these standards.”