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Speaker Fees


Numerous Foreign Corrupt Practices Act enforcement actions have involved the enforcement theory that various foreign health care professionals (HCP’s) are “foreign officials” and thus occupy a status similar to a President, Prime Minister, or other traditional bona fide government official.

Several of these enforcement actions have included allegations that HCP’s received speaker fees or honoraria from pharmaceutical or medical device companies.

For instance, the Sanofi enforcement action included allegations that an HCP was provided “with consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation or other support to demonstrate the services had been provided.”

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Clinical Trials


The recent enforcement action against Novartis (the second time the company has resolved an Foreign Corrupt Practices Act matter) concerned, in part, a clinical trial.

According to the DOJ’s information, the “clinical trial scheme” involved Novartis Greece making “improper payments to HCPs [healthcare professionals] related to an epidemiological study intended to increase sales of certain Novartis-branded prescription drugs.” According to the information, Novartis Greece “falsely recorded these payments … as advertising and promotion expenses in Novartis Greece’s internal accounting records.”

The SEC’s administrative order further found: “Novartis Korea employees in the neuroscience business unit devised a local non-interventional clinical study with 17 pre-selected HCPs to improve relationships with those HCPs. The study was organized in May 2013 through a local medical journal with Novartis Korea providing the list of HCPs to participate and the $100,000 funding necessary to complete the study. Novartis Korea recorded the funding to complete the study as advertising expenses and failed to have the study reviewed and approved by medical affairs as required by internal procedures.”

As highlighted below, prior to the Novartis enforcement action several other FCPA enforcement actions also referenced clinical trials.

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Alexion Pharmaceuticals Resolves $21.5 Million Enforcement Action


Yesterday, the SEC announced that Alexion Pharmaceuticals (a company that has been under scrutiny since mid-2015) agreed to approximately $21.5 million to resolve an enforcement action based on the actions of foreign subsidiaries involving the company’s primary drug Soliris.

The conduct at issue focused on Alexion Illac Ticarent Limited Sirketi (Alexion Turkey), Alexion Pharma OOO (Alexion Russia), Alexion Pharma Brazil and Alexion Pharma Colombia SAS (all wholly-owned subsidiaries whose books and records were consolidated into Alexion’s financial statements).

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Novartis Joins The Repeat Offender Club – This Time Paying Approximately $347 Million To Resolve An FCPA Enforcement Action


What happens when the Greek, Swiss, and South Korean subsidiaries of a Swiss company engage in improper conduct in Greece, Vietnam and South Korea? Why of course, approximately $345 million flows into the U.S. treasury.

Yesterday, Novartis joined the long and growing list of FCPA repeat offenders as the DOJ and SEC announced (see here and here) a combined approximate $347 million enforcement action. (As highlighted in this prior post, in 2016 Swiss pharmaceutical company Novartis coughed up $25 million to resolve a SEC FCPA enforcement action focused on the conduct of its indirect Chinese subsidiaries).

Yesterday’s enforcement action included a DOJ component (in which the company agreed to pay approximately $234 million) and a SEC component (in which the company agreed to pay approximately $113 million).

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Bill Seeks To Transfer Pharma FCPA Civil Settlement Amounts To Pediatric Disease Research


Childhood cancer and other rare pediatric diseases are heartbreaking.

But should certain FCPA settlement amounts fund pediatric disease research?

Representative Jennifer Wexton (D-Va) thinks so as she, along with co-sponsors  Tom Cole (R-OK), Peter Welch (D-VT) and Gus Bilirakis (R-FL), recently introduced H.R. 6556 – a bill that seeks to amend the FCPA’s anti-bribery provisions by transferring FCPA civil settlement amounts by pharmaceutical companies to pediatric disease research. The bill is titled the Gabriella Miller Kids First Research Act 2.0. Miller (pictured – died of cancer in 2013 at the age of 10).

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