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Pfizer facing possible fines over bribery claim in China

Publication Date : 16-08-2012

 

A lawyer in Beijing has called for the country's top prosecution authority to investigate allegations of bribery involving pharmaceutical giant Pfizer, which has been found to have made improper payments to medical workers and regulators in eight countries, including China.

Hao Junbo, a lawyer at the Lehman Law Firm in Beijing, said yesterday that he submitted a letter and an e-mail to the Supreme People's Procuratorate (SPP) on Friday asking it to look into the case.

The New York-based pharmaceutical company was accused of offering bribes to doctors and officials in European and Asian countries to obtain regulatory and formulary approvals, sales, and prescriptions for its products, the US Securities and Exchange Commission (SEC) said in a news release in early August.

Pfizer China created "point programmes" under which the doctors could receive gifts like reading glasses, mobile phones and tea sets based on the number of prescriptions they wrote for Pfizer products, according to the commission's complaint.

In the case of Wyeth, a pharmaceutical company belonging to Pfizer, subsidiaries in China, Indonesia and Pakistan were found offering cash and other gifts to doctors who recommended their nutritional products, and using fake invoices to hide the improper payments, the SEC said.

Pfizer's misconduct dated back to 2001, the SEC complaint said. Pfizer neither admitted nor denied the claims.

The company announced on Aug. 7 that it had voluntarily reported to the US government about improper payments by its overseas subsidiaries, and that a Pfizer indirect subsidiary (Pfizer H.C.P. Corp) will enter into a deferred prosecution agreement with the US Department of Justice and pay a US$15 million fine.

Pfizer also agreed to give back tens of millions of dollars in profit.

The US Department of Justice declined to bring criminal action against Pfizer, according to an announcement on the company's website.

Pfizer had revenue of $67.4 billion in 2011, of which $40.5 billion was from markets outside the United States, according to a report in the Wall Street Journal.

China Daily could not reach Pfizer China for comment yesterday.

Phone calls to the publicity department of the SPP also went unanswered yesterday.

Sun Bingting, a doctor at a hospital in Rizhao of East China's Shandong province, said that in many hospitals it's an "unwritten rule" for pharmaceutical companies to bribe doctors.

"The amount of 'gray income' [from illegal sources] for many department directors in our hospital is even higher than their salaries," Sun said, adding that he could not give the name of his hospital for fear of retaliation from his director.

Hao, the lawyer, said that China's judicial authorities should investigate the bribery cases of Pfizer China and punish the company with high fines because it did not voluntarily report its misconduct to Chinese judicial authorities.

"Pfizer has voluntarily reported to the US judicial authority about its activities and paid a large fine," he said in the letter to the SPP.

Hao suggested the SPP levy a fine double that in the US since the company "ignores China's laws".

"Not only companies like Pfizer should be sued, those taking bribes have also violated Chinese laws."

Hao said he had received an online reply from the SPP on Tuesday afternoon, which said that his e-mail has been received and the SPP is considering his suggestion.

"What the international companies want is powerful enforcement of the law, and those having violated the rules must be punished," Hao said, adding that he is a legal consultant for the China branches of many international companies.

 

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