Bristol-Myers Squibb has agreed to pay more than $14 million to settle US Securities and Exchange Commission charges over acts of bribery in China.
The SEC alleged that the firm’s Chinese arm made cash payments and provided other benefits to healthcare providers at state-owned and state-controlled hospitals in China in exchange for prescription sales, thus violating the Foreign Corrupt Practices Act.
It claims the New York-based pharma “lacked effective internal controls” over interactions between healthcare providers and BMS China, which enabled sales representatives to offer cash, jewelry and other gifts, meals, travel, entertainment, and sponsorships for conferences and meetings in order to boost drug sales.
BMS China inaccurately recorded the spending as legitimate business expenses in its books and records, which were then consolidated into the books and records of BMS.
According to the SEC, BMS reaped more than $11 million in profits from its misconduct, which has neither been admitted nor denied by the drugs giant. But the drugmaker has agreed to return profits of $11.4 million, plus prejudgment interest of $500,000 and a civil penalty of $2.75 million.