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Novartis, Alcon to pay combined $347 million to resolve US bribery allegations

Novartis, Alcon to pay combined $347 million to resolve US bribery allegations

Novartis stated on Thursday that it has reached deals with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) to settle all foreign bribery investigations into certain past misconduct by the company and its subsidiaries. As part of the agreements, Novartis and some of its current and former business units will pay a criminal penalty of $233.9 million to the DOJ, while the drugmaker will also pay $112.8 million to the SEC.

Brian Benczkowski, Assistant Attorney General of the DOJ’s criminal division, said “Novartis’ subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes.”

Specifically, to resolve the DOJ investigation, Novartis’ Hellas unit has entered into a deferred prosecution agreement (DPA) over a scheme to bribe employees of state-owned and -controlled healthcare facilities in Greece from 2012 to 2015 in connection with the ophthalmology drug Lucentis (ranibizumab). The DPA also covers books and records pertaining to the Lucentis matter, as well as conduct related to a 2009 epidemiological study. As a result, Novartis’ Hellas unit has agreed to pay a $225-million criminal penalty to the DOJ.

Meanwhile, Novartis’ former Alcon unit, which was spun-off from the Swiss drugmaker in April last year, reached a separate DPA with the Justice Department over falsifying books and records from 2011 through 2014 to cover up bribes paid to health professionals in Vietnam in order to boost sales of its intraocular lenses in the country. Alcon has agreed to pay the DOJ a criminal fine of $8.9 million to settle the case.

In a related matter with the SEC, Novartis agreed to pay the securities regulator disgorgement and prejudgment interest totaling $112.8 million for the conduct in Greece and Vietnam, as well as conduct in South Korea, which Novartis said involves violations that it has already taken responsibility for. The company said it is in the final stages of resolving the issues with local authorities in South Korea. The SEC agreement also addresses certain internal controls and books and records issues related to Alcon China’s placement of surgical devices.

Shannon Thyme Klinger, general counsel at Novartis, said “we are pleased that all outstanding FCPA (Foreign Corrupt Practices Act) investigations into the company are now closed. Today’s settlements represent another milestone in our commitment to resolving legacy compliance issues.”

June 25th, 2020

https://www.firstwordpharma.com/

June 26, 2020 / Pharma News
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