Pfizer, Wyeth Pay $60 Million In Settlement

A subsidiary of Pfizer Inc. agreed with the DOJ today to pay a $15 million criminal penalty to resolve FCPA violations in Bulgaria, Croatia, Kazakhstan, and Russia.

Pfizer also agreed with the SEC to pay $26.3 million in disgorgement of profits and pre-judgment interest to settle civil charges. And Wyeth LLC, acquired by Pfizer three years ago, separately agreed to pay $18.8 million to the SEC in disgorgement and pre-judgement interest.

The DOJ gave the subsidiary, Pfizer H.C.P., a two-year deferred prosecution agreement. It charged the company in a two-count information with conspiracy and violations of the FCPA for improper payments to government officials, including publicly-employed regulators and health care professionals. The information and the deferred prosecution agreement were filed today in federal court in the District of Columbia.

The DOJ said Pfizer helped 'U.S. authorities in ongoing FCPA investigations of other companies and individuals.'

Other pharmas known to be facing FCPA investigations include AstraZeneca, Baxter International, Bio-Rad Laboratories, Bristol-Meyers Squibb, Covidien, Eli Lilly, GlaxoSmithKline, Merck, Sciclone Pharmaceuticals, Talecris Biotherapeutics, and Teva.

Pfizer's employees and agents paid bribes in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia, the SEC said. Improper payments went to foreign officials 'to obtain regulatory and formulary approvals, sales, and increased prescriptions for the company’s pharmaceutical products.'

Pfizer's people tried to conceal the bribery, the SEC said, by improperly recording the transactions in accounting records as legitimate expenses for promotional activities, marketing, training, travel and entertainment, clinical trials, freight, conferences, and advertising.

In addition to the $15 million criminal penalty paid to the DOJ, Pfizer disgorged to the SEC $16,032,676 in net profits and prejudgment interest of $10,307,268 for a total of $26,339,944. Wyeth disgorged $17,217,831 in net profits and prejudgment interest of $1,658,793, for a total of $18,876,624.

'Pfizer took short cuts to boost its business in several Eurasian countries,' the DOJ said, 'bribing government officials . . . . to the tune of millions of dollars.'

Pfizer today said: 'The actions which led to this resolution were disappointing, but the openness and speed with which Pfizer voluntarily disclosed and addressed them reflects our true culture and the real value we place on integrity and meeting commitments.'

In 2009, Pfizer paid $2.3 billion in civil and criminal penalties to U.S. enforcement agencies for unlawful prescription drug promotions.

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The DOJ's August 7, 2012 release is here.

The SEC's news release is here.

The SEC's Litigation Release No. 22438 and Accounting and Auditing Enforcement Release No. 3399 (both dated August 8, 2012) for U.S. Securities and Exchange Commission vs. Pfizer Inc., Civil Action No. 1:12-cv-01303 (D.D.C.) (filed Aug. 7, 2012) and U.S. Securities and Exchange Commission vs. Wyeth LLC, Civil Action No. 1:12-cv-01304 (D.D.C.) (filed Aug. 7, 2012) are here.

The SEC's civil complaint againt Pfizer can be downloaded here.

The SEC's civil complaint against Wyeth can be downloaded here.