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.
Discussion Questions
- 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
Grewal Levy Marketing News 
This article proves that companies must be incredibly careful with their actions. Pfizer failed to check international regulations and also failed to ensure that representatives were performing actions that were in the best interest in the company. Because of these failures they will be taking a large blow that could affect the future of the company. It’s unfortunate but it is something that any company must pay attention to especially when entering the international markets. I really enjoyed reading this article because as a young business student, it reminds me of the things I will need to look out for in the future so that any company I am working for does not reach the same fate as Pfizer.