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Harry Cassin
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Sanofi pays $25 million to resolve widespread FCPA offenses

Big pharma Sanofi agreed Tuesday to pay $25.2 million to resolve charges that it paid bribes across the Middle East and in Kazakhstan to win business.

The SEC said Sanofi violated the FCPA’s books and records and internal accounting controls provisions.

Without admitting or denying the findings, Sanofi agreed to pay a civil penalty of $5 million, plus $17.5 million in disgorgement and $2.7 million in prejudgment interest.

The SEC settled the case with an internal administrative order (pdf) and didn’t go to court.

Paris-based Sanofi said in March the DOJ had closed its four-year FCPA investigation without bringing an enforcement action.

Tuesday’s SEC order said Sanofi bribed officials from 2011 to 2013 at public hospitals and clinics in Jordan, Lebanon, Syria, Bahrain, Kuwait, Qatar, Yemen, Oman, and the United Arab Emirates.

Sanofi’s sales people generated money for the bribes by submitting false travel and entertainment reimbursement claims. They pooled the money and distributed it as bribes “to increase prescriptions of Sanofi products,” the SEC said.

In Kazakhstan, distributors used a kickback scheme between 2007 and 2011 “to generate funds from which bribes were paid to officials to ensure that Sanofi was awarded tenders.”

Sanofi tracked the kickbacks in Kazakhstan on internal spreadsheets where they were coded as “marzipans.”

The company first disclosed the investigation in 2014, based on tips from an anonymous whistleblower.

On Tuesday, Charles Cain, chief of the SEC’s FCPA unit, said bribery “in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally.”

More work “needs to be done to address the particular risks posed in the pharmaceutical industry,” Cain said.

The SEC said it had help from the Autorité des marchés financiers in France.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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