In recent years, the pharmaceutical industry has been under scrutiny from both government agencies and the public for various reasons. One company that has been in the spotlight is Teva Pharmaceuticals. Teva is the largest generic drug manufacturer in the world, and it has been accused of engaging in unethical practices that have resulted in harm to patients. In 2016, Teva entered into a deferred prosecution agreement with the U.S. Department of Justice (DOJ) to settle allegations of bribery and corruption.
A deferred prosecution agreement is a type of legal settlement that allows a company to avoid criminal charges if it agrees to certain conditions. In the case of Teva, the company agreed to pay $519 million in fines and penalties and to implement new compliance measures to prevent future misconduct. The DOJ had accused Teva of paying bribes to government officials in Russia, Ukraine, and Mexico to increase sales and profits.
The deferred prosecution agreement with Teva was significant because it marked the first time that a pharmaceutical company had been charged with violating the Foreign Corrupt Practices Act (FCPA). The FCPA is a federal law that prohibits companies from bribing foreign officials to obtain or retain business. The law was enacted in 1977 to combat corruption in international business transactions.
The charges against Teva were brought by the DOJ`s Fraud Section, which is responsible for enforcing the FCPA. The Fraud Section has been increasingly active in recent years, and it has brought charges against a number of companies, including Walmart, General Electric, and Alstom. The Teva case was particularly significant because it involved the pharmaceutical industry, which is heavily regulated and subject to strict compliance requirements.
Teva`s deferred prosecution agreement required the company to take a number of steps to improve its compliance program. These included hiring a compliance monitor for three years, implementing new policies and procedures, and conducting regular training for employees. The company also agreed to cooperate with the DOJ`s ongoing investigation and to report any future misconduct.
The Teva case highlights the importance of compliance for companies operating in the pharmaceutical industry. With increasing scrutiny from regulatory agencies and the public, companies must ensure that they are following ethical and legal standards to avoid potentially costly fines and damage to their reputation. The deferred prosecution agreement with Teva serves as a warning to other companies in the industry that engaging in corrupt practices will not be tolerated.