Corruption Risks for Pharmaceutical Companies

Pharmaceutical and medical device companies are fast becoming the enforcement punching bag, eclipsing the long-suffering status of the oil and gas energy.  If you ignore the political and public relations challenges facing the pharmaceutical and medical device industries, you are being naive.  In almost every possible area for enforcement, pharmaceutical and medical companies have been the targets of aggressive criminal, civil and regulatory action.

While a new and more aggressive anti-corruption enforcement scheme was launched in 2007 under the Bush Justice Department, the continuing series of anti-corruption enforcement actions against these companies is the repeating headline in 2012 for FCPA enforcement.  There is plenty more to come – there are close to 20 more companies who have publicly disclosed ongoing anti-corruption investigations.  Eventually, this trend will slow down but for now it keeps going. 

Pharmaceutical and medical device companies know how to comply with anti-corruption laws.  They are experienced in the world of compliance given the significant involvement of the US and foreign governments in regulation of the health care industry. 

The Justice Department’s sweep of the pharmaceutical and medical device industries rests on the premise that foreign doctors, nurses and other health care professionals are “foreign officials” when they work at a public hospital or are part of a public health care system.  The Justice Department’s premise has never formally been challenged in court, but it is likely to be upheld under court review.