Pharmaceutical drug giant Pfizer has agreed to pay the US government a total of $60 million to lay to rest charges over cases of bribery by overseas subsidiaries aiming to secure business for the firm abroad.
Improper payments from two of its subsidiaries outside of the US were actually voluntarily reported by Pfizer to the authorities back in 2004, resulting in charges against the company under the Foreign Corrupt Practices Act.
To resolve these what Pfizer calls "historical issues", an indirect subsidiary of group will enter into a deferred prosecution agreement with the US Department Of Justice, paying a fine of $15 million.
Under the terms of a civil settlement with the US Securities and Exchange Commission (SEC), Pfizer agreed to a disgorgement of profits of $16 million and prejudgment interest of $10.3 million.
In addition, in a separate civil settlement with the SEC, Pfizer’s subsidiary Wyeth, which it acquired in 2009, has agreed to a disgorgement of profits of $17.2 million and prejudgment interest of $1.66 million to settle charges of improper payments made by four of its subsidiaries outside the US.
"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, chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act Unit.
“These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations,” she warned.
Unaware of conduct
However, Pfizer was keen to stress that there are no allegations from either the DOJ or the SEC that officials at Pfizer and Wyeth's corporate headquarters knew or approved of this conduct, and in fact had praised Pfizer's cooperation with the investigation, including its “thorough and responsive reporting of potential violations,” and “early and extensive remedial efforts".
The DOJ charges covers improper conduct in Bulgaria, Croatia, Kazakhstan, and Russia, while the SEC's civil settlement covers all of these countries as well as Italy, China, the Czech Republic and Serbia.
Pfizer’s due diligence review of Wyeth identified improper payments in China, Saudi Arabia, Indonesia and Pakistan, the firm said.