The recent $45 million settlement of bribery charges against the pharmaceutical firm Pfizer shows just how challenging it can be to stay within legal boundaries when selling overseas. This challenge has grown increasingly stringent with greater recent enforcement of the U.S. Foreign Corrupt Practices Act.
When Pfizer moved into foreign countries, it needed to get doctors to prescribe its drugs if it were to succeed. Therefore, in China for example, it initiated a points program—doctors who prescribed a certain amount of Pfizer products would earn a specified number of points. They then could exchange those points for gifts, such as tea sets or cell phones. In some situations, that description is a simply loyalty program. Nothing wrong with that, right?
Not quite. In the many foreign countries that have centralized medical systems, doctors are government employees. And the Foreign Corrupt Practices Act forbids any U.S. company from paying anything to any government employee in return for any benefits.
In addition, not all of Pfizer representatives’ actions could be blamed on a misunderstanding. In Indonesia and Pakistan, the cash payments to doctors were clear bribes, and the representatives covered up their practices by issuing fake invoices.
The settlement came as a result of a wide-ranging investigation by U.S. government officials into drug sales. Johnson & Johnson settled a similar lawsuit in 2011. Thus Pfizer is not the only one charged with bribing foreign nationals—just the most recent.
- Are gifts and promotional items given to doctors unethical or just regular business practice?
- Why do pharmaceutical reps engage in such practices?
Source: Katie Thomas, “Pfizer Settles U.S. Charges of Bribing Doctors Abroad,” The New York Times, August 7, 2012