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HomeCRIMESanofi offers to pay $25 m to drop charges of corrupt practices

Sanofi offers to pay $25 m to drop charges of corrupt practices

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Sanofi S.A. a French multinational and the world’s fifth-largest pharmaceutical company by prescription sales headquartered in Paris, France, has offered to pay $25 million to settle charges of corruption and unfair business practices levied against its subsidiaries in Kazakhstan and Middle East by the U.S. Securities and Exchange Commission (SEC).

The SEC investigations had found Sanofi guilty of violating the books, records and internal accounting control provisions of the federal securities laws.

The SEC’s probe into violations of U.S. Foreign Corrupt Practices Act were made possible by a coordinated investigations by the Fraud Section of the Department of Justice, Federal Bureau of Investigation, and Autorité des marchés financiers in France.

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The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency. The SEC’s primary task is to monitor that companies make truthful statements about their businesses and ensure that securities institutions, such as brokers, dealers and exchanges, treat investors in an honest and fair manner.

According to the SEC’s order, the schemes spanned multiple countries and involved bribe payments to government procurement officials and healthcare providers to approve its tenders and to increase prescriptions of its products.

Sanofi is primarily engaged in research and development, manufacturing and marketing of pharmaceutical drugs — vitamin, mineral and supplement in the prescription market, but also develops over-the-counter medication—across seven major therapeutic areas: cardiovascular, central nervous system, diabetes, internal medicine, oncology, thrombosis and vaccines.

Sanofi’s range of pmedroducts include medicines for type 1 and type 2 diabetes, cancer, cardiovascular disease, osteoporosis, conditions of the central nervous system and thrombosis. Sanofi Pasteur is the world’s largest vaccine manufacturer developing influenza, poliomyelitis, meningococcal and paediatric vaccines.

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Sanofi distributors in Kazakhstan used a kickback scheme to generate funds from which bribes were paid to officials to ensure that Sanofi was awarded tenders at public institutions. The kickbacks were tracked in internal spreadsheets coded as “marzipans.” In the Middle East, various pay-to-prescribe schemes were used to induce healthcare providers to increase their prescriptions of Sanofi products.

Joint investigations by the SEC and U.S. Department  of  Justice (DOJ), reportedly also found Sanofi to be involved in unfair business practices in Kazakhstan,  Jordan,  Lebanon,  Bahrain,  Kuwait,  Qatar,  Yemen,  Oman,  United  Arab Emirates  and  Palestine between 2006  and 2015.

“Bribery in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally,” said Charles Cain, FCPA Unit Chief, SEC Enforcement Division. “While bribery risk can impact any industry, this matter illustrates that more work needs to be done to address the particular risks posed in the pharmaceutical industry.”

As a part of the settlement, Sanofi has agreed to full cooperate with the investigation as well as strengthen and enhance compliance of internal anti-bribery and corruption control programs. Without admitting or denying the findings, Sanofi has agreed to a cease-and-desist order and pay $17.5 million in disgorgement, $2.7 million in prejudgment interest, and a civil penalty of $5 million.

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“Sanofi  requires  all  our  employees  to  act  with  integrity  and  to  follow  the  highest standards of conduct.   We have worked diligently to strengthen our compliance program  worldwide  and  we  are  pleased  the  DOJ  and  SEC  recognized  these efforts  and  our  close  cooperation,” said  Olivier  Brandicourt,  Sanofi’s  Chief Executive  Officer.

“We  will  continue  to  strengthen  internal  controls,  anti-bribery and  corruption  compliance  programs,  and  our  oversight  and  training  of  teams worldwide.  Conducting  our  activities  in  an  ethical  way  is  something  that  our company takes very seriously”, he added.

Significantly the Competition Commission had dismissed allegations of unfair business practices made against Sanofi India with respect to supply of medicines.

Sanofi “does not appear to be dominant in the market and in the absence of dominance, the question of abuse of dominance does not arise”, the CCI order stated.

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Taazakhabar News Bureau
Taazakhabar News Bureau
Taazakhabar News Bureau is a team of seasoned journalists led by Neeraj Mahajan. Trusted by millions readers worldwide.


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