The Securities and Exchange Commission (SEC) has ordered Pfizer to pay $45m (£29m) to settle charges that the multinational pharmaceutical company acted illegally by offering bribes to win business in Europe and China.
The SEC said that Pfizer staff and agents in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia made the payments to healthcare professionals in order to obtain regulatory approvals and increase sales.
They then tried to conceal the bribery by falsely recording the transactions in accounting records as legitimate expenses for promotional activities, marketing, training, travel and entertainment, clinical trials, freight, conferences, and advertising, the regulator said. This included frequently creating false invoices to cover up cash payments.
The drug giant's actions were in clear violation of the US Foreign Corrupt Practices Act (FCPA), which bars publicly traded companies from bribing officials in other countries to obtain or retain business.
Kara Brockmeyer, chief of the SEC enforcement division's FCPA unit said: 'Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers. These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations.'
The SEC said Pfizer's misconduct dated back as far as 2001. It also investigated similar activities at another pharmaceutical company, Wyeth, which was acquired by Pfizer a few years ago.
Pfizer has neither admitted nor denied the allegations in the course of settlement. The SEC said it would not take further action in view of the company's cooperation with its investigation.
Pfizer has undertaken what the SEC described as 'extensive remedial actions', including undertaking a comprehensive worldwide review of its compliance programme.
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