UK drug firms put under microscope over 'bribery'

The world's largest pharmaceutical companies are facing a corruption investigation in the United States over claims that the hospitality lavished on those who prescribe their treatments could constitute bribery.

Britain's two biggest drug groups, GlaxoSmithKline (GSK) and AstraZeneca, are among those facing the investigation, which is being carried out jointly by the Department of Justice (DoJ) and Securities and Exchange Commission (SEC). The investigation is thought to centre around allegations that drugs companies might have contravened the Foreign Corrupt Practices Act (FCPA), which limits their ability to spend on such "soft' inducements" as hospitality, charitable donations and other non-business activities.

The list of the companies under investigation contains many of the global pharma industry's biggest names: Pfizer, Bristol-Myers Squibb and Eli Lilly are among those under the spotlight.

The DoJ is looking into claims that the industry has for years ignored obligations under anti-bribery legislation, and that the situation is so stark, some of the hospitality extended to those that buy treatments could amount to bribery.

The probe is into activities outside the US. If found guilty, the industry could face fines totalling millions of dollars.

Both GSK and AstraZeneca acknowledged the investigation yesterday. It is understood that GSK received a letter at the end of April, which said that the DoJ was making preliminary inquiries under the FCPA.

"GSK confirms that investigations by the US Department of Justice and the Securities and Exchange Commission regarding the sales and marketing of pharmaceutical products outside of the USA have commenced," the group said in a statement. "These inquiries relate to the USA Foreign and Corrupt Practices Act. GSK has been contacted by these agencies in this context and is helping with the preliminary inquiries."

A spokesman for AstraZeneca, said: "AstraZeneca plc has received inquiries from the US Department of Justice and the Securities and Exchange Commission in connection with an investigation into Foreign Corrupt Practices Act issues in the pharmaceutical industry. AstraZeneca is cooperating with their inquiries."

The group pointed out that it had made the disclosure as far back as March, when it reported its first-quarter results.

Analysts downplayed speculation that the investigation could lead to large fines, adding that soft inducements are regarded as normal.

"As part of their continuous career development, physicians attend medical conferences once or twice a year," said Savvas Neophytou of Panmure Gordon.

"Often the pharmaceutical industry pays for physicians' travel expenses and meals," he explained. "At such conferences, drug reps often hand out corporate toys as learning aids when physicians complete certain tasks in exercises often designed to promote a company's product."

Mr Neophytou added: "Is this clever marketing or bribery? In our view most physicians remain fiercely independent and take part in such activities for what they were intended: to comprehend better new treatment guidelines and up-to-date medical data.

"Even if the industry is found to have crossed some lines, we take examples from similar FCPA investigations that to conclude the investigation is likely to take a number of years and could result in penalties that the industry should be able to absorb easily."

News of the investigation did little to upset investors as GSK's share price gained 2.38 per cent to close the day on 1,224.5p. AstraZeneca's shares lost just 0.02 per cent, ending the day on 3,295p.

News
Brand said he
people
Sport
Adam Lallana, Juan Cala, Andy Carroll and Cameron Jerome
sportThe latest news and scores
Voices
Actor Zac Efron
voicesTopless men? It's as bad as Page 3, says Howard Jacobson
Life & Style
Sampling wine in Turin
food + drink...and abstaining may be worse than drinking too much, says scientist
VIDEO
Arts & Entertainment
tvGrace Dent on TV
Arts & Entertainment
The monster rears its head as it roars into the sky
film
Voices
For the Love of God (2007) The diamond-encrusted skull that divided the art world failed to sell for
its $100m asking price. It was eventually bought by a consortium
which included the artist himself.
voicesYou can shove it, Mr Webb – I'll be having fun until the day I die, says Janet Street-Porter
Sport
Mercedes driver Lewis Hamilton of Britain drives in the rain during the qualifying session of the Chinese Formula One Grand Prix in Shanghai
sport
Extras
indybestFake it with 10 best self-tanners
Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
peopleOrlando Bloom the pin-up hero is making a fresh start
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Life & Style
The North Korean TV advert for Taedonggang beer, that became a YouTube hit
food + drinkAnd what did it take to set up a taste test back in Wiltshire?
Arts & Entertainment
filmLife for Leslie Mann's can be challenging sometimes
Voices
For music lovers: John Cusack with his vinyl collection in 'High Fidelity'
voices...but don't forget rest of the year
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit