These companies are not just risking their reputations; they are risking lives.
The world’s largest pharmaceutical companies including GlaxoSmithKline, AstraZeneca, Eli Lilly, Bristol-Meyers Squibb, Merck and more will be subject to an ongoing probe by DOJ.
The basis for these probes: the Foreign Corrupt Practices Act. The act bars any American company from offering items of value to foreign officials for profit. Because of this restriction, pharmaceutical companies operating abroad are constantly walking a narrow line. Most hospitals and healthcare centers in foreign countries are state-run – making all employees (doctors included) foreign officials as defined under the FCPA. This means dinners, gifts, and any other special treatment for foreign doctors or healthcare professionals could land Big Pharma in some deep water for offering bribes to foreign officials.
Technically:
As the Financial Times reports, DOJ is investigating all acts that could be in violation of the Foreign Corrupt Practices Act. Violations of the FCPA resulting from over-gracious dinners, all-expense-paid travel, and many other standard Big Pharma practices will be scrutinized.
The real issue:
Investigating lavish dinners and hospitality is far from the extent of the probe. The DOJ will be investigating more serious, more egregious violations of American law by looking into Big Pharma’s relationships with physicians who work on clinical trials, but also serve on regulatory boards.
In international healthcare, getting a drug approved in certain markets can net a pharmaceutical company billions of dollars. Unfortunately, this means that a drug’s approval might reflect the intense lobbying efforts of the pharmaceutical companies, not the best science. For this reason, the FCPA must be ardently enforced to ensure protection of the health and safety of consumers everywhere. Violations of American laws whose effect is to push drugs through foreign approval programs are inexcusable. These transgressions put the legitimacy of the global healthcare industry at risk and also jeopardize the safety of thousands of patients in Big Pharma’s quest to make a buck.
Potential whistleblower?
This DOJ investigation could very well be among the first spurred by a whistleblower under the new Dodd-Frank financial reform act. The act, passed just weeks ago, allows concerned, informed citizens to speak up about corporate securities violations by filing complaints with DOJ or the SEC. (Click here and here to read our posts about the Dodd-Frank Financial Reform Act) The Dodd-Frank act historically opened up new avenues for whistleblowers to bring claims related to the FCPA. We at the Corporate Observer are watching the developments closely, and the internet is abuzz (see here) with conjecture as to whether or not this investigation is a result of a new type of corporate whistleblower. Of course there will be no proof until we move farther down the road, but the prospect of an average citizen inspiring such a massive investigation to protect consumers and healthcare patients around the world is inspiring.
Assisted by Zach Kady