Pssst - Hey foreign goverment want to sell my drugs?
The US Department of Justice (DOJ) probe into big pharma corruption in foreign markets came to light back in August. Here is an update on this investigation from yesterday's WSJ. According to the WSJ, Merck, AZ, BMS, GSK, Lilly, Baxter and Sciclone have all received notice that they are part of the investigation of possible violations of the Foreign Corrupt Practices Act (FCPA). No charges have been filed yet and may never eventuate.
The FCPA makes it illegal for companies whose stock is traded in the US to bribe government officials in other countries to obtain business. This investigation is focused on events that have occurred in Brazil, China, Germany, Italy, Poland, Russia and Saudi Arabia (looks like we're one BRIC shy of a load) - some of the fastest growing global markets where presumably companies are trying to gain a foothold/market share and competition is intense.
Four types of violations appear to be the focus of the investigation:
- Bribing government employed doctors to purchase drugs
- Paying company sales agents commissions that are passed along to government doctors
- Paying hospital committees to approve drug purchases
- Paying regulators to win drug approvals
Well, it looks like we have everyone in loop except patients covered. Maybe some couponing for them.
Additonally, some bribes may have been made to physicians to influence drug trial results. Astute readers probably note that anothergoverment concern of late is the increasing number of drug trials going to foreign markets. This becomes problematic as the FDA has fewer enforcement and inspection resources to devote to that activity - certainly fewer resources than they think they need to do a good job. The Senate has a bill under consideration to step up FDA enforcement capability.
Lanny Breuer, the head of the Justice Department's Criminal Division, told drug-company executives last year that investigating foreign bribery in the industry would be one of his priorities over the next several years, given the size and growth of its overseas sales. Here. Here.
Posted by Bruce Lehr October 6th 2010.
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