WASHINGTON
— The US charged Pfizer and its subsidiary Wyeth on Tuesday with paying
millions of dollars in bribes to build their business in Eastern Europe and
China, and set hefty fines on the two to settle the charges.
The US
charged Pfizer and its subsidiary
Wyeth with paying millions of dollars in
bribes
(AFP/Getty Images/File, Mario Tama)
|
The
Department of Justice and the Securities and Exchange Commission both said
Pfizer subsidiaries paid off officials, doctors and healthcare professionals in
Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia
during 2001-2007 in violation of the US Foreign Corrupt Practices Act.
Employees
of subsidiaries made the payoffs to secure approval and registration of Pfizer
and Wyeth products, and obtain sales contracts for them, according to court
filings and statements from the department and SEC.
"Pfizer
subsidiaries in several countries had bribery so entwined in their sales
culture that they offered points and bonus programs to improperly reward
foreign officials who proved to be their best customers," said Kara
Brockmeyer, head of the SEC's Foreign Corrupt Practices Act Unit.
But the
Justice Department and SEC said Pfizer officials had not been aware of the
payments, and were strongly cooperative with investigators, mitigating the need
for criminal prosecution and heavy penalties.
Pfizer
subsidiary Pfizer HCP agreed to pay a $15 million penalty to the department
under a deferred prosecution agreement to resolve the investigation.
Pfizer will
also pay the SEC $26.3 million in forgone profits, while Wyeth, the drugmaker
that Pfizer took over in 2009, will give up $18.8 million in disgorged profits.
"Pfizer
HCP received a reduction in its penalty as a result of Pfizer Inc.'s
cooperation in the ongoing investigation of other companies and
individuals," the Justice Department said.
"Corrupt
pay-offs to foreign officials in order to secure lucrative contracts creates an
inherently uneven marketplace and puts honest companies at a
disadvantage," said James McJunkin, assistant director of the Washington
field office of the Federal Bureau of Investigation.
"Those
that attempt to make these illegal backroom deals to influence contract
procurement can expect to be investigated by the FBI and appropriately held
responsible for their actions."
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