Pharma company settles SEC foreign bribe case for $519 million

A multinational pharmaceutical company will pay $519 million to settle foreign corruption charges, the Securities and Exchange Commission (SEC) announced Thursday.

Teva Pharmaceutical Industries Limited allegedly made $214 million in illicit profits by bribing government officials in Russia, Mexico and Ukraine, violating the Foreign Corrupt Practices Act. Those bribes gave Teva a greater market share, regulatory and formula approvals, and “favorable drug purchase and prescription decisions,” the SEC said.

“As alleged in our complaint, Teva failed to devise and maintain proper internal accounting controls to prevent the company’s payments of bribes to win business in certain regions around the globe,” said Stephanie Avakian, deputy director of the SEC enforcement division.

{mosads}Teva will pay the SEC the $214 million in profit plus $22 million in interest. It will also pay $283 million penalty to the Department of Justice.

“Many of these bribes were concealed as legitimate payments to distributors,” said Eric I. Bustillo, director of the SEC’s Miami regional office. “While distributors can help companies navigate complex regulatory environments and provide valuable industry relationships, they also can create significant corruption risks for companies.”