Another Foreign Corrupt Practices Act Prosecution in Life Sciences

StuffingCashinPocketThe life science industry has been a frequent target of prosecution of Foreign Corrupt Practices Act (FCPA) violations.

Another company, Bio-Rad, just settled with both the Department of Justice (DoJ) and Securities Exchange Commission (SEC), which involved a payment of $55 million.

Life science pharmaceutical and medical device companies have been the target of government scrutiny because in most foreign countries, the purchase of these products is controlled by a “foreign official” as defined in FCPA.

Paul Hastings, the law firm, prepared a helpful article on this recent case and the derivative regulatory and legal actions typically resulting from a settlement.

Excerpts:

“As of last year, approximately one out of every four FCPA investigations involved a life sciences company.”

“Given the U.S. government’s continued FCPA enforcement efforts, as well as the ongoing risk of related shareholder litigation and rapidly evolving threat of so-called “carbon copy” foreign prosecutions, it remains imperative that pharmaceutical, medical device, and biotechnology companies be even more proactive in ensuring compliance with the FCPA and other anti-corruption laws.”

This is a challenging issue for companies who use independent distributors in international markets but merits careful management attention to avoid being another example.

Click here to read the Paul Hastings article.

For those who would like more on this topic, I recommend a series of articles, so far, Parts I though III, by Thomas Fox in his “FCPA Compliance and Ethics Updates” on JDSupra, the online legal source (Click here for Part I).