Life Science Compliance Update

January 19, 2018

Christmas Comes Early - The FCPA Pilot Program Made Permanent

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When we first introduced the FCPA Pilot Program in the June 2016 issue, we noted the uncertainties of outcomes for companies who voluntarily self-disclose potential violations. On November 29, 2017, Deputy Attorney General Rod Rosenstein announced that the US Department of Justice (DOJ) had made the FCPA Pilot Program permanent. This article will review some of the key highlights outlined by the DOJ and some considerations for compliance professionals.

The heat is on life science companies. Since 2013, there have been 25 Foreign Corruption Practices Act (“FCPA”) matters involving life science companies, 13 of which occurred in the last two years. Although life science companies have not been immune to FCPA investigations in the past, the statement of Acting Chief of the U.S. Department of Justice (“DOJ”) Fraud Section, Sandra Moser in August was loud and clear - the DOJ would be increasing its enforcement efforts of healthcare related companies.

We reviewed the outcomes of the FCPA Pilot Program (“Pilot Program”) in the September 2017 issue of the Update, examining the benefits of self-disclosure under the program. Now, a year since its inception, the DOJ has announced that the Pilot Program will now be permanent.

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September 22, 2017

To Disclose or Not to Disclose… That is the Question: The DOJ’s FCPA Pilot Program – Insights from Year One and Beyond

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It has been over one-year since the US Department of Justice has launched its pilot program aimed to incentivize companies to self-report potential Foreign Corrupt Practices Act violations. Since its launch on April 5, 2016, the Justice Department resolved nine investigations. However, the question still remains – “Is the carrot bigger than the stick?” This article examines settlement trends before and during the Pilot Program to answer the question of whether or not it is sensible to self-disclose.

Last month, Sandra Moser, the acting chief of the DOJ’s Fraud Section made it clear that the DOJ would be increasing its enforcement efforts of healthcare related companies. Although life science companies have not been immune to Foreign Corrupt Practices Act (“FCPA”) investigations in the past, Moser stated that the DOJ viewed the healthcare industry as ‘one that faces serious compliance and corruption challenges not only in high risk markets overseas but right here at home as well.’ Simply put, life science companies will be under the FCPA microscope more than ever.

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April 24, 2017

TEVA - Using Legitimate Distributor Payments to Conceal Bribes

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On December 22, 2016, the Securities and Exchange Commission (SEC) announced that Teva Pharmaceutical Industries Limited had agreed to pay more than $519 million to settle parallel civil and criminal charges that it violated the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials in Russia, Ukraine, and Mexico. The interesting aspect of this settlement is as the government alleges, the bribes were concealed in the form of legitimate payments to distributors.

It has been a long time coming. The U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) have been investigating the Israeli drug giant, Teva Pharmaceutical Industries Limited (“Teva”) for alleged Foreign Corrupt Practices Act (“FCPA”) violations since 2012. Four years later and right before Obama left office, the SEC finally announced a settlement with Teva.

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