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« Alleged Mastermind In Mexico Bribes Case Still Missing | Main | Shot-Show Trial Opens In DC »
Tuesday
May172011

Is Pharma Under Fire In Indonesia?

As we said, two FBI agents at an international law enforcement conference last week said several U.S. public companies are being investigated for bribery in Indonesia.

The agents wouldn't name names.

But signs point to pharma.

In 2009, assistant AG Lanny Breuer of the DOJ's criminal division warned that industry about overseas bribery. At a November conference that year of pharma lawyers, he said:

In the pharmaceutical context, we have additional expertise that significantly enhances our ability to proactively investigate and prosecute these often complex cases. . . . And we are seeing increasing international cooperation, coordination and information sharing. . . . . Our focus and resolve in the FCPA area will not abate, and we will be intensely focused on rooting out foreign bribery in your industry. That will mean investigation and, if warranted, prosecution of corporations to be sure, but also investigation and prosecution of senior executives.

Since then, GlaxoSmithKline, Merck, AstraZeneca, Eli Lilly, Baxter, SciClone, and Bristol-Myers Squibb have said they received questions from the DOJ and SEC about foreign sales practices. Pfizer is also reported to have disclosed to U.S. authorities some payments outside the U.S. that may violate the FCPA. 

After the DOJ's Breuer spoke directly to the pharma lawyers, he repeated his warning to an FCPA confab in Washington:

As I mentioned in a speech last week to the Pharmaceutical Regulatory and Compliance Congress, one area of focus will be overseas sales in the pharmaceutical industry. In some foreign countries and under certain circumstances, nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a "foreign official" within the meaning of the FCPA. The depth of government involvement in foreign health systems, combined with fierce industry competition and the closed nature of many public formularies, creates, in our view, a significant risk that corrupt payments will infect the process. Our remarkable FCPA unit and our terrific health care fraud unit will be working together to investigate FCPA violations in the pharmaceutical industry in an effort to maximize our ability to effectively enforce the law in this high-risk area.

Indonesia's healthcare system fits Breuer's description. It has heavy government involvement, and contact with "foreign officials" by drug makers and marketers is frequent.

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