Pfizer settles to avoid bribery court case
Next time the Americans complain about a British firm bribing foreign officials, remember this:
American Pharmaceutical giant Pfizer has agreed to pay a $60 million fine to settle charges filed against the company alleging illegal bribery. According to CNN Money, both Pfizer and Wyeth, the latter of which has since merged with Pfizer, paid off foreign officials in Europe and Asia to speed up drug approvals, and give preference to Pfizer drugs in their countries’ public health programs, which in turn generated billions of dollars for the world’s largest drug company.
“Corrupt pay-offs to foreign officials in order to secure lucrative contracts creates an inherently uneven marketplace and puts honest companies at a disadvantage,” said James McJunking of the FBI’s Washington, D.C., field office in a statement concerning the case.
According to the U.S. Securities and Exchange Commission (SEC) (http://www.sec.gov/), which will receive a $45 million cut of the settlement, Pfizer was in direct violation of the Foreign Corrupt Practices Act (FCPA) when it illegally boosted its profits by bribing doctors and public health officials in Bulgaria, China, Croatia, the Czech Republic, Italy, Kazakhstan, Russia, and Serbia. Pfizer officials allegedly rewarded doctors in these countries with cash and vacations to prescribe more Pfizer drugs.
In China, for instance, Pfizer officials rewarded government physicians who prescribed large amounts of the company’s medications by inviting them to meetings and conferences with “extensive entertainment activities,” according to the SEC.
In Croatia, government doctors were given a portion of the proceeds from Pfizer’s sales of drugs to the doctors’ own institutions, said the agency.
In Bulgaria, local Pfizer representatives spent $28,000 to invite government doctors on “incentive trips” to Greece, as a reward for the physicians who were the biggest prescribers of Pfizer’s products, Pfizer admitted according to the Justice Department filing. They also paid $17,000 to send doctors to medical conferences, again in exchange for commitments to prescribe Pfizer drugs.
Apparently, knowing that it could get caught, Pfizer attempted to hide these illicit transactions by burying them in accounting records as business expenses – bribes were entered into the books in such a way as to make them appear as travel expenses, training costs, freight charges, and entertainment.
According to Bloomberg (http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=PFE) 2012 revenue for Pfizer was $59 billion. $60 million is chickenfeed.