British Bribery Law Worries U.S. Drug Companies

A new British anti-bribery law taking effect in April is spurring multinational companies to strengthen their compliance programs.

According to The Wall Street Journal, British officials may use the law — modeled after the U.S. Foreign Corrupt Practices Act but considered more stringent — to target pharmaceutical companies.

The Bribery Act, as the law is called, bars any company operating in Britain, whether foreign or domestic, from making an illicit payment not only to public officials, but also to private citizens or businesses. It also covers bribes between individual businessmen and applies, legal experts say, even when an individual making the payment doesn’t realize the transaction is a bribe.

Officials at Britain’s Serious Fraud Office point to investigations by the U.S. Department of Justice into charges of bribery against drug companies and medical device manufacturers as the sorts of cases that the new law would allow them to pursue. In August, for example, the Financial Times reported that the Department of Justice had initiated an investigation into pharmaceutical giants such as Pfizer and Merck for potentially illegal payoffs.

In addition to industries with a track record for illegal payoffs, firms from regions of the world with high incidences of corruption will also be targeted, the Journal reported.

UK officials have said that a robust compliance regime is the best way for a company to avoid being singled out. But while pharmaceutical companies and other firms scramble to strengthen their compliance procedures and otherwise prepare for the law’s implementation, a cloud of uncertainty regarding how zealously the law is to be enforced hangs over the activity.

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One comment to “British Bribery Law Worries U.S. Drug Companies”

  1. Barry Vitou

    Pharmaceutical companies are right to be concerned.

    Richard Alderman the Director of the UK Serious Fraud Office issued a stark warning to attendees of a pharmaceutical industry conference in the fall/autumn of this year, which we reported on here

    The warning was similar to a warning which the US DOJ issued to the US pharmaceutical industry a year ago and which was followed by a slew of disclosures by pharmaceutical companies in their public filings that they had received enquiries from the US DOJ about practices in various markets. That investigation is ongoing.

    Many of the recent UK convictions have involved joint investigations and prosecutions with the US (BAE last week which we posted on here was the most recent and highly publicised example). In other words, the US is a bell weather of what will happen in the UK since enforcement agencies on both sides of the Atlantic are working hand in glove.

    Interested in news about the Bribery Act? Then check out our free website with insight and analysis of the law and enforcement trends.

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