Big Pharm Company Settles with Government over Bribery Charges
The pharmaceutical company Pfizer and its subsidiaries bribed doctors in Bulgaria, Serbia and six other countries, provided junkets and even paid off government officials in Croatia to win approval of its products, according to a settlement announced this week.
The 22-page complaint unveiled by the U.S. Securities and Exchange Commission depicts secret payments to bank accounts in Austria, wholesale corruption in the medical ranks and an elaborate scheme that netted at least $16 million in profits for the company over several years. The crimes range from the petty – doctors being bought off for trips to Greece and an official receiving $1,200 per month to sell out his offices – to broader efforts to corrupt entire government programs.
All was done with the intent of boosting Pfizer sales by getting doctors, hospitals and regulators to illegally promote its drugs, according to court records. Most of the cases were a decade old, and stem from several investigations, the justice department said.
What the complaint doesn’t do is identify the people who carried out the crimes. In announcing two settlements totaling $60 million with Pfizer, U.S. investigators repeatedly omitted names of participants in the scheme.
The U.S. attorney agreed to defer criminal charges as part of the settlement.
One entry said the company shipped $1,200 per month to “the Austrian bank account of a doctor who served as a member of several Croatian government committees,’’ that decided which drugs would be approved for state reimbursements. Those approvals are lucrative, since only approved companies can receive government payments.
“He is a person of great influence in Croatia … and his opinion is respected,’’ according to a company memo cited in the complaint. The person is never mentioned, and the payments stopped in 2003.
In Serbia, Pfizer’s subsidiary gave a government doctor an all-expense paid trip to Chile in exchange for his promise to buy more Pfizer products for his department. When senior managers uncovered the scheme, they attempted to end it, the complaint said. But they dropped those plans when the unnamed doctor threatened to "spread negative information about Pfizer’s reputation."
Bulgarian doctors reached formal agreements with the company to prescribe a set amount of drugs in exchange for trips.
Some of the most extensive allegations stem from operations in Russia and China. Pfizer officials in China sponsored exclusive meetings known as “clubs,’’ and devised a point system to reward government doctors who prescribed the most medicine. Pfizer’s Moscow office enlisted hospitals with promises of kickbacks for 5 percent of product purchased, and paid doctors through illegal slush funds, the complaint said.
Again, no names were included in the document. SEC officials said the company cooperated in the investigation and has taken “extensive remedial efforts” and promised not to break the law again.