U.S. Agencies Praise Company’s Cooperation and Compliance Program
Pfizer Inc. today announced it has resolved U.S. Department of Justice
(DOJ) and Securities and Exchange Commission (SEC) matters related to
certain improper payments in the operations of two of its subsidiaries
outside the United States, which Pfizer voluntarily reported to the U.S.
government beginning in 2004. To resolve those historical issues, a
Pfizer indirect subsidiary (Pfizer H.C.P. Corporation) will enter into a
deferred prosecution agreement with the DOJ, and pay a fine of $15
million. Under the terms of a civil settlement with the SEC, Pfizer Inc.
agreed to a disgorgement of profits of $16 million and prejudgment
interest of $10.3 million. The DOJ declined to bring a criminal action
against Pfizer Inc.
In a separate civil settlement also announced today with the SEC,
Pfizer’s Wyeth subsidiary has agreed to a disgorgement of profits of
$17.2 million and prejudgment interest of $1.66 million to resolve
issues involving certain improper payments in the operations of four
subsidiaries outside the United States. Pfizer conducted a risk-based
Foreign Corrupt Practices Act (FCPA) due diligence review of Wyeth’s
global operations after it acquired the company in late 2009 and, as it
had with its own issues, promptly and voluntarily disclosed these issues
to the U.S. government.
There is no allegation by either DOJ or SEC that anyone at Pfizer’s or
Wyeth’s corporate headquarters knew of or approved the conduct at issue
before Pfizer took appropriate action to investigate and report it. As
soon as these local activities came to the attention of Pfizer’s
corporate headquarters, they were voluntarily brought to the attention
of the DOJ and SEC. Today’s settlements are focused solely on these
local activities.
Both the DOJ and SEC praised Pfizer’s cooperation with the investigation
and its enhanced compliance program. In the deferred prosecution
agreement, the DOJ noted “the extraordinary cooperation of Pfizer
H.C.P.’s parent company, Pfizer Inc.,” including “thorough and
responsive reporting of potential violations,” as well as “early and
extensive remedial efforts.” The SEC highlighted Pfizer’s creation of
“innovative and proactive anti-corruption compliance reviews” and its
commitment to “comprehensive anti-corruption training throughout the
organization.”
“The actions which led to this resolution were disappointing, but the
openness and speed with which Pfizer voluntarily disclosed and addressed
them reflects our true culture and the real value we place on integrity
and meeting commitments,” said Amy Schulman, executive vice president
and general counsel for Pfizer. “We expect every colleague across Pfizer
to adhere to the highest standards of conduct, and we will continue to
hold ourselves and our colleagues accountable for maintaining these
standards. We are grateful that the DOJ and the SEC specifically
recognized our extensive proactive compliance efforts and cooperation
with the investigation, which demonstrates the hard work of many
colleagues throughout the world and underscores the ongoing productive
work we have done in this area.”
All the conduct at issue was investigated by Pfizer and voluntarily
disclosed to the U.S. government. Pfizer began self-reporting to the
U.S. government in 2004 after the discovery of certain improper payments
that had been made by employees of a recently-acquired Pfizer affiliate
in Croatia. Pfizer legal and compliance staff, outside counsel and
auditors then conducted an intensive, global, multi-year internal
investigation. Throughout this period, Pfizer regularly briefed both the
DOJ and SEC on its findings.
The DOJ settlement with Pfizer H.C.P. Corporation covers improper
conduct in Bulgaria, Croatia, Kazakhstan, and Russia. The Pfizer SEC
civil settlement covers improper conduct in all of these countries as
well as in Italy, China, the Czech Republic and Serbia.
In addition, Pfizer’s post-acquisition due diligence review of Wyeth
identified certain improper payments in China, Saudi Arabia, Indonesia
and Pakistan. Pfizer identified these legacy-Wyeth issues within 180
days after the acquisition closed, voluntarily disclosed them to the
U.S. government, and they are covered in Wyeth’s separate SEC civil
settlement.
In recognition of the depth of Pfizer’s extraordinary and proactive
efforts to self-report dating back to 2004, as well as its adoption of
an extensive anti-corruption compliance program, the DOJ and the SEC
agreed that the appointment of an independent compliance monitor for the
company was unnecessary.
As part of its agreement with the DOJ, Pfizer H.C.P. Corporation will
continue to cooperate with the DOJ for a period of two years in
connection with its settlement. Pfizer Inc. will continue to maintain
the rigorous anti-corruption systems and innovative compliance program
that it voluntarily developed and implemented, including the proactive
market reviews and trend analyses it pioneered approximately five years
ago. The company already has integrated Wyeth operations and employees
into those programs and systems.
“We have worked diligently to strengthen our corporate compliance
program worldwide,” said Douglas Lankler, executive vice president and
chief compliance and risk officer for Pfizer. “We are pleased that the
DOJ and SEC today recognized these efforts and our close cooperation. We
have instituted rigorous oversight and accounting mechanisms and
pioneered a host of new tools designed to maintain compliance and detect
problems before they spread.”
Some of Pfizer’s corporate compliance measures include the following:
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Developed and implemented an enhanced set of anti-corruption policies
and procedures;
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Designed an innovative, anti-corruption internal audit program used
throughout the world to detect potential misconduct;
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Pioneered annual proactive market reviews – a cutting-edge FCPA
compliance monitoring tool – which scrutinizes commercial practices in
a risk-based sample of non-U.S. markets to ensure compliance with
company policies;
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Formed a mergers and acquisitions compliance function designed to
support due diligence reviews of complex business transactions and to
help ensure the integration of new businesses into Pfizer’s compliance
program;
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Established other processes by which it closely monitors its
relationships with non-U.S. health care providers and government
officials; and
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Implemented global mandatory training for all appropriate colleagues
on its anti-corruption program and the need to maintain compliance in
the area.
Pfizer Inc: Working together for a healthier world™
At Pfizer, we apply science and our global resources to improve health
and well-being at every stage of life. We strive to set the standard for
quality, safety and value in the discovery, development and
manufacturing of medicines for people and animals. Our diversified
global health care portfolio includes human and animal biologic and
small molecule medicines and vaccines, as well as nutritional products
and many of the world’s best-known consumer products. Every day, Pfizer
colleagues work across developed and emerging markets to advance
wellness, prevention, treatments and cures that challenge the most
feared diseases of our time. Consistent with our responsibility as the
world’s leading biopharmaceutical company, we also collaborate with
health care providers, governments and local communities to support and
expand access to reliable, affordable health care around the world.
For more than 150 years, Pfizer has worked to make a difference for all
who rely on us. To learn more about our commitments, please visit us at www.pfizer.com.
