Enforcement of the Foreign Corrupt Practices Act,(1) including the number of investigations and the size of settlements, has increased significantly over the past several years. Against this backdrop of increased enforcement, in November 2009 the Department of Justice announced that it planned to investigate the pharmaceutical and medical device industries for suspected violations of the act.(2) The department recently backed up these warnings when a small number of pharmaceutical companies received notice that they were under investigation to determine whether they had made improper payments to foreign physicians and health officials in various countries.
The investigation has expanded to include at least 12 major drug and medical device companies that are under investigation by federal prosecutors and securities regulators for possible act violations.(3) The focus of the department’s recent inquiry appears to include concerns as to whether these companies have made payments or other improper inducements to non-US physicians to influence the results of clinical trials of drugs and devices that might find their way into the US market.
The effect of the alleged conduct could be significant considering that it is “estimated that between 40 percent and 65 percent of clinical trials investigating [Food and Drug Administration]-regulated products are conducted outside the United States”.(4) Indeed, 80% of the drugs approved for sale in 2008 underwent clinical trials in foreign countries, and over half of all clinical trial subjects and sites were located abroad.(5) Prosecutors are now investigating payments made to physicians who manage these clinical trials for pharmaceutical and device companies.
via Foreign Corrupt Practices Act pharmaceutical investigation expands – International Law Office.