Israeli based multinational pharmaceutical company Teva, decided to pay over $519 million to settle U.S. criminal and civil allegations that the organization bribed international officials to gain business for its drugs, the U.S. Department of Justice said on December 22, 2016.
The Teva paid out millions of dollars in bribes to representatives in Mexico, Russia and Ukraine to promote its medicines like its blockbuster multiple sclerosis medicine Copaxone, the Justice Department said.
Teva will pay out a $283 million penalty to settle Foreign Corrupt Practices Act allegations with the Justice Department. Teva will also give up $236 million in profits to resolve a civil investigation by the U.S. Securities and Exchange Commission. Teva’s Russia subsidiary pleaded guilty to conspiring to break the Foreign Corrupt Practices Act.
Teva confessed that its executives bribed officers to be able to win over $65 million in inflated, “corrupt” profits in Russia.
Teva also confessed to bribing a Ukrainian government official to be able to gain acceptance for the sale of the company’s drugs.
The briberies took place over several years, according to the Justice Department.
The SEC stated that the company’s bribe scheme brought the company over $200 million in illegal profits.
Teva said that since 2012 it had taken various steps to address problems of governance, which includes naming a global head of compliance and ending problematic business relationships.
Teva, said none of the employees engaged in the improper payments were any longer with the organization, and that it had changed its entire leadership team in Russia in 2013.
The inappropriate conduct did not involve U.S. sales, Teva said.
The Act makes it an offense to bribe foreign government authorities to win business irrespective of whether the payments are made directly or through other means like as luxurious entertainment or footing the bill for international travel.
The organization, whose shares are listed on the New York and Tel Aviv stock exchanges, must also maintain an independent corporate monitor for a minimum of three years, the SEC said.