Novartis agrees $347m settlement for bribery allegations

Swiss pharma company Novartis has reached a settlement with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) to resolve investigations into its allegedly corrupt overseas practices.

According to a statement issued by the DOJ, Novartis’ subsidiary in Greece bribed employees of state-owned and state-controlled hospitals and clinics in the country to falsely record improper payments relating to the corrupt scheme and similar conduct.

Between 2012 and 2015, Greece specifically paid for employees of state-owned and state-controlled hospitals and clinics to travel to and attend international medical congresses as means of bribery. In return, the officials increased the number of prescriptions they wrote for Lucentis (ranibizumab), an ophthalmology product marketed and sold by Novartis.

A separate agreement was reached with the DOJ for a similar scheme involving Alcon Pte Ltd, a Novartis AG subsidiary at the time of misconduct,  which also falsely recorded improper payments in Vietnam.

According to a statement released by the DOJ, between 2011 and 2014, Alcon employees in Vietnam made corrupt payments through a third-party distributor to employees of state-owned and state-controlled hospital and clinics to increase sales of intraocular lenses.

Alcon employees reimbursed the distributor of these lenses for up to 50% of the cost of the corrupt payments, and falsely recorded the reimbursements as consulting expenses, marketing expenses, and human resource expenses, among others.

“We are pleased that all outstanding FCPA investigations into the company are now closed. Today’s settlements represent another milestone in our commitment to resolving legacy compliance issues and ensuring that Novartis truly lives its values,” said Shannon Thyme Klinger, group general counsel of Novartis.

“We have implemented and continue to implement initiatives to ensure we operate with the same high ethical values wherever we do business, and we remain focused on building trust with society,” she added.

As part of the settlements for the individual cases, Novartis and certain of its current and former subsidiaries are set to pay $233.9m to the SOJ and $112.8m to the SEC. As part of these agreements, all outstanding investigations into Novartis’ breach of the Foreign Corrupt Practices Act (FCPA) are closed.