Most people think about Wall Street when the topic of the Securities and Exchange Commission comes up. However, SEC enforcement goes far beyond the financial sector in the United States. In fact, Andrew Ceresney, director of the SEC’s Division of Enforcement, said in a speech given earlier this month, his agency has been and continues to be hyper-focused on the pharmaceutical sector and its interactions around the globe.
He told the CBI’s Pharmaceutical Compliance Congress that the targeted the enforcement of the Foreign Corrupt Practices Act (FCPA) within the pharmaceutical industry has yielded many successful cases. At the end of the day, he said, his division believes Big Pharma has increased its compliance with regulatory guidelines regarding dealings with foreign governments and healthcare facilities and practitioners as set forth by the SEC.
Pharma is a “high-risk industry for FCPA violations,” Ceresney said. One of the most concerning risks, he explained, is the amount of bribery that is going on at many levels of the supply chain. As such, the director outlined three major areas of misconduct that the SEC is monitoring within the pharmaceutical sector:
Pay-to-Prescribe – When public healthcare facilities and physicians accept bribes (either cash or some other type of compensation that results in physicians being rewarded for choosing certain drugs over others)
Bribes to get drugs on the formulary list – This is exactly what it sounds like: companies pay authorities to put drugs on the formulary list so that insurance companies will cover them
Bribes disguised as charitable contributions: It is against the FCPA to give anything – money, gifts, anything of “value” to an official to retain their business. This includes gifts made under the guise of being charitable contributions. “The lesson is that bribes come in many shapes and sizes, and those made under the guise of charitable giving are of particular risk in the pharmaceutical industry,” Ceresney said.
The SEC official pledge to continue to lead his department in its careful scrutiny of FCPA compliance. “…Whether it is cash, gifts, travel, entertainment, or charitable contributions, we will continue to pursue a broad interpretation of the FCPA that addresses bribery in all forms.”
If you or someone you know has information about a person or company trying to defraud the government, contact experienced whistleblower lawyer Ross Begelman about your case.