SEC opens Teva bribery probe
The SEC has subpoenaed documents related to the company's operations in Latin America.
Teva added in its filing with the SEC that it has opened a voluntary investigation into “certain business practices which may have Foreign Corrupt Practices Act implications” and had hired outside legal counsel to assist in the probe.
Teva is the latest company in a three-year investigation by the US Department of Justice into the pharmaceutical industry’s compliance with the 1977 Foreign Corrupt Practices Act, which prohibits companies from bribing foreign officials in exchange for business.
Teva's Latin American sales totaled $221 million revenue for the second quarter.
The Justice Department and the SEC say that doctors and other employees of government-run overseas hospitals qualify as foreign officials under the law. They therefore consider some industry practices, such as paying a doctor to encourage the physician to buy a medicine, as a violation of the law if the doctor works for a foreign state-owned institution.
A Teva spokeswoman stated, “These matters are in their early stages and no conclusion can be drawn at this time as to any likely outcome."
Spokeswomen for the Justice Department and the SEC declined to comment.
Other companies investigated in the probe include Merck & Co. (NYSE: MRK), AstraZeneca plc (LSE: AZN), Bristol-Myers Squibb Co. (NYSE: BMY), and GlaxoSmithKline plc (NYSE; LSE: GSK). The four companies have said in regulatory filings that they received letters of inquiry from the Justice Department and the SEC. The companies have said they are cooperating with investigators. Johnson & Johnson (NYSE: JNJ) has paid $70 million to settle allegations, and Pfizer Inc. (NYSE: PFE; LSE: PFZ) may pay $60 million to settle an investigation.
Teva's share price fell 2.4% in morning trading on the TASE to NIS 157.10, after falling 0.1% on the NYSE on Friday to $39.51, giving a market cap of $34.3 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 5, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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