SNY Sanofi

By Samuel Rubenfeld 

French pharmaceutical company Sanofi agreed to pay $25.2 million to resolve Securities and Exchange Commission allegations that its subsidiaries made bribery payments to win business.

The alleged schemes spanned multiple countries and involved bribes to government procurement officials and health-care providers to receive tenders and increase prescriptions of the company's products, the SEC said. The alleged payments violated the Foreign Corrupt Practices Act, which bars bribes of foreign officials for business purposes, the SEC said.

The SEC said Sanofi violated the books-and-records and internal-control provisions of the FCPA. The company neither admits nor denies the SEC's allegations.

Sanofi agreed to a cease-and-desist order and agreed to pay $17.5 million in disgorgement, $2.7 in interest and a $5 million civil penalty.

The company has strengthened its compliance program in the wake of the investigation, Sanofi Chief Executive Olivier Brandicourt said in a statement. "We will continue to strengthen internal controls, anti-bribery and corruption compliance programs, and our oversight and training of teams worldwide."

The probe began after the company received a series of anonymous allegations that wrongdoing had occurred between 2007 and 2012 in parts of the Middle East and East Africa, the company said in 2014. In subsequent annual reports, the company had said alleged wrongdoing may have happened as recently as 2015.

Earlier this year, the company said the Justice Department had ended its yearslong investigation into potential FCPA violations by Sanofi.

According to the SEC, Sanofi generated funds for the illicit payments through fake expenses improperly recorded in the company's books and records. The firm's foreign subsidiaries carried out the various schemes, the SEC said.

Sanofi's distributors in Kazakhstan were used as part of a kickback scheme from which officials were paid to ensure Sanofi received tenders at public institutions; the kickbacks were tracked in internal spreadsheet and coded as "marzipans," the SEC alleged.

Pay-to-prescribe schemes were used by the units based in Lebanon and the United Arab Emirates to induce health-care providers to increase their prescriptions of Sanofi products across the Middle East and Persian Gulf region, the SEC said.

Bribery-connected pharmaceutical sales continue to be a problem despite multiple enforcement actions involving the industry, and life sciences more generally, said Charles Cain, who leads the FCPA unit of the SEC's enforcement division.

"While bribery risk can impact any industry, this matter illustrates that more work needs to be done to address the particular risks posed in the pharmaceutical industry," he said in a statement.

Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com

(END) Dow Jones Newswires

September 04, 2018 14:24 ET (18:24 GMT)

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