Novartis Agrees $347 Million Settlement for Bribery Charges

The Swiss multinational pharma company admitted to improper conduct wherein staff of its overseas subsidiaries were paid to boost drug sales through bribery.

Novartis International AG has reached settlements with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) to resolve all currently active investigations into the allegedly improper conduct of its overseas subsidiaries.

In a statement, DOJ assistant attorney general Brian Benczkowski described the company as having “profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products,” and concealing evidence of said bribery by falsifying records.

According to the agreement reached, Novartis Greece paid employees to provide “improper benefits” of its drug Lucentis to doctors between 2012 and 2015 to boost sales, and falsified records to conceal evidence of criminality.

A similar scheme was conducted by Alcon Pte Ltd, Novartis’s former subsidiary in Vietnam, where employees made corrupt payments through a third party to staff at state-run medical centres to boost sales of intraocular lenses. Again, records were falsified to record the issued bribes as consulting, marketing and human resource expenses.

With the settlement payments – which total $234 million to the DOJ and $113 million to the SEC – “all outstanding FCPA investigations into the company are now closed,” according to a statement issued by General counsel Shannon Thyme Klinger.

Today’s settlements represent another milestone in our commitment to resolving legacy compliance issues and ensuring that Novartis truly lives its values.”

The Greek government has announced that it will be seeking compensation from Novartis for losses incurred by the state in connection with the bribery scandal.

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