Background

A pharmaceutical company has agreed to pay more than $21 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act. This amount includes $14.2 million in disgorgement, $3.8 million in prejudgment interest, and a $3.5 million penalty.

According to a press release from the Securities and Exchange Commission, two of the company’s subsidiaries made payments to foreign government officials to secure favorable treatment for one of the company’s drug products. Specifically, one subsidiary paid Turkish government officials to improperly influence them to approve patient prescriptions and provide other favorable regulatory treatment. Another subsidiary made improper payments to Russian government health care officials to favorably influence the regulatory treatment of and the budget allocated to the drug as well as to increase the number of approved prescriptions. These subsidiaries maintained false books and records of these improper payments that the parent company’s internal accounting controls were not sufficient to detect or prevent.

Further, the SEC states, the company’s subsidiaries in Brazil and Colombia failed to maintain accurate books and records, including by creating or directing third parties to create inaccurate financial records concerning payments to patient advocacy organizations.

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