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Israeli drugmaker Teva pays $519 million fine in US for foreign bribes

Teva CEO Erez Vigodman

US Justice Department announced Thursday that Israeli Teva Pharmaceutical Industries will pay $519 million fine to settle charges concerning violations of the Foreign Corrupt Practices Act (FCPA). Teva admits that it paid bribes to foreign officials to win business in Russia, Ukraine and Mexico.

In Russia, Teva paid bribes to a “high-ranking Russian government” official who used his authority to boost sales of the Teva multiple sclerosis drug Copaxone, resulting in more than $200 million in profits for Teva and about $65 million for the Russian official between 2010 and 2012, the Justice Department said.

In Ukraine, Teva admitted to paying bribes in two cases in 2001 and 2011 to a senior government official, who agreed to promote Teva drugs.

In Mexico, Teva’s subsidiary paid bribes to doctors employed by the Mexican government since at leat 2005, according to the Justice Department.

Teva will pay a criminal penalty of $283 million to the Department of Justice. It also agreed to pay $236 million in disgorgement to the Securities and Exchange Commission in a parallel case.

Teva today said, “The resolution involves conduct occurring in the past, and none of the employees involved in the improper payments are still employed by Teva, including in Russia, where the entire leadership team was replaced in 2013. None of the conduct in question involved Teva’s US sales.”
According to it press release, Teva learned of the suspected FCPA violations in 2012, then it began its own independent investigation extending to the company’s entire global activity. “The Teva of today is a fundamentally different company, ” stated Vigodman. “We welcome working with the monitor as an added step in our process to ensure the program we have put in place is working as designed. Teva has a compliance culture that begins with a strong tone at the top, including our executive regional and local management and a culture of compliance that underpins every single business decision that Teva makes.”

 

 

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