Healthy Skepticism Library item: 18593

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Publication type: news

McKee S
US Justice Departments investigates pharma for corruption
Pharma Times 2010 Aug 16
http://www.pharmatimes.com/Article/10-08-16/US_Justice_Departments_investigates_pharma_for_corruption.aspx

Full text:

Some of the world’s top drugmakers are being scrutinised across the Atlantic under an international investigation into corruption in the pharmaceutical sector.

The US Department of Justice and the Securities and Exchange Commission have jointly launched a probe into allegations that certain pharmaceutical firms – including GlaxoSmithKline, AstraZeneca and Merck – have breached the Foreign Corrupt Practices Act (FCPA), the purpose of which is essentially to curb bribery.

The investigation is focused on whether the activities of certain pharmaceutical groups outside of the US are in violation of the FCPA and thus amount to corruption and bribery, which could trigger fines of millions of dollars within the industry if any are indeed found to fall foul of the law.

For example, the DoJ is paying close attention to whether any corrupt payments have weighted the reliability or integrity of clinical data from studies undertaken outside of the US, law group Arnold & Porter told the Financial Times, particularly as the majority of regulatory approvals include at least such one trial. In addition, hospitality practices are also said to be under the microscope.

In a statement to PharmaTimes World News, AstraZeneca confirmed that it is part of the DoJ and SEC investigation into adherence with the FCPA, and that is is “co-operating with inquiries”. However, the company added that it did not think it is appropriate “to comment at this time on matters that are the subject of the DOJ and SEC inquiries.”

A spokesperson for GSK told PharmaTimes World News that it indeed received a letter relating to the investigation back in April, but stressed that in this particular instance, and from a GSK perspective, the enquiries are very much at a preliminary stage, whereas other drug companies already have ongoing interactions with the DoJ and SEC. Merck also disclosed that it has received inquiry letters in relation to activities in a number of countries in a recent quarterly SEC filing.

News of the probe doesn’t seem to have caused too much fright among analysts. “Even if the industry is found to have crossed some lines, we take examples from similar FCPA investigations that to conclude the investigation is likely to take a number of years and could result in penalties that the industry should be able to absorb easily,” Savvas Neophytou of Panmure Gordon told The Independent.