Bristol-Myers settles SEC charges over China bribery scandal for $14.2M
- The U.S. Securities and Exchange Commission (SEC) has fined Bristol-Myers Squibb (BMS) $14.2 million for violating the Foreign Corrupt Practices Act by engaging in illegal behavior in China, including bribery, between 2009 and 2014.
- The SEC also accused BMS of lackadaisical oversight and a lack of internal audits.
- For several years, the SEC has been quietly investigating the way pharmaceutical companies behave in foreign markets.
News of pharmaceutical company misbehavior makes headlines on a fairly regular basis, with the most infamous recent example being GlaxoSmithKline and its various ethical challenges. However, the SEC has independently uncovered cases of bribery at BMS, and also received voluntary disclosure of wrongdoing abroad from Sanofi, Novartis, and Teva.
The accusation in this situation involves payment of bribes to healthcare practitioners at state-run hospitals between 2009 and 2014. Some of the cases involved reflect a high level of cynicism and outright misbehavior, including among employees who were fired, who essentially said that they needed to bribe doctors in 2010 and 2011 in order to meet their sales targets. One of the sales reps guilty of the behavior attempted to obfuscate the bribery by using the rather Orwellian euphemism of "departmental development fee."
Apparently this is a practice that went on for years in China. But BMS says it is determined to make sure that this bad behavior is routed out. In the meantime, they can be certain of one thing: The SEC will not be turning a blind eye to this sort of practice.