Novartis Settles Bribery Charges under Foreign Corrupt Practices Act in Relation to Medicine-Related Conduct in Greece
Novartis AG, its subsidiary Novartis Hellas S.A.C.I., and its former subsidiary Alcon Pte Ltd (together Novartis) have agreed to pay total fines in excess of US $ 345 million to settle cases started by the US Department of Justice (the DOJ) and the US Securities and Exchange Commission (the SEC) under the US Foreign Corrupt Practices Act (FCPA) (see, attached press releases of 25 June 2020). A significant part of the practices alleged to be in violation of the FCPA took place in Greece.
Novartis was under investigation because it had made illicit payments to employees of state-owned or state-controlled health institutions in Greece and had also mischaracterised and falsely recorded these payments in its company books and accounts. For the US agencies, these payments amounted to bribery and their false characterisation as an attempt to cover up a crime.
The case serves as a reminder that conduct in Europe engaged in by a European firm and possibly in violation of European pharmaceutical and anti-bribery rules may also give rise to extensive exposure under US anti-corruption laws.
Novartis admitted that, between 2012 and 2015, it bribed healthcare professionals in Greece in an attempt to increase the sale of Novartis-branded pharmaceutical products. Specifically, Novartis allowed healthcare professionals to travel overseas to medical congresses, including events held in the United States, in exchange for an assurance that these healthcare professionals would augment the number of prescriptions for Lucentis, a prescription-only ophthalmological medicine.
Novartis also admitted that, between 2009 and 2010, it made improper payments to healthcare professionals in connection with an epidemiological study that was intended to increase sales of Novartis-branded prescription medicines. Novartis staff recognised that many participating healthcare professionals understood that they were being paid in exchange for writing prescriptions of Novartis products and not for supplying data as part of a clinical study.
Novartis not only agreed to pay sizeable fines, it also committed to cooperate with the US government in pending or future connected criminal investigations. Additionally, Novartis promised to enhance its compliance programmes, report on the implementation of enhanced compliance programmes, and take other remediation steps.