A biopharmaceutical company settled SEC charges for Foreign Corrupt Practices Act bribery and books and records violations. The charges stemmed from payments made to foreign health officials for certain favorable regulatory treatment and prescription approvals of the company's primary drug product.
The SEC alleged that between 2010 and 2015, the company's managers (i) bribed government officials in Turkey in order to obtain approval of its primary drug for individual patient prescriptions, and (ii) bribed government officials in Russia to obtain regional healthcare budget approvals for its primary drug and to increase the number of prescriptions for the drug.
In the Order, the SEC stated that the company made payments using, among other things, (i) a third-party consultant, (ii) honoraria, and (iii) grants to influence the health care providers inappropriately, and then recorded those payments inaccurately. In addition, the SEC charged the company with books and records violations at the company's Brazilian and Colombian subsidiaries, due to false and misleading entries relating to payments to both healthcare providers and intermediaries who paid the healthcare providers. As a result of these violations, the SEC determined that the company violated SEA Sections 13(b)(2)(A) and 13(b)(2)(B).
To settle the charges, the company agreed to (i) disgorge $14,210,194 in unjust profits, (ii) pay $3,766,337 in prejudgment interest, and (iii) a civil monetary penalty of $3,500,000.
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