This month, the Securities and Exchange Commission announced that the Boston-based Pharmaceutical company Alexion Pharmaceuticals had agreed to pay more than $21 million to resolve claims it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act. The SEC’s order shows that two Alexion subsidiaries made payment to foreign government officials to secure favorable treatment for the company’s primary drug Soliris.
The order finds that from 2010 to 2015, Alexion Turkey paid Turkish government officials to improperly influence them to approve prescriptions and give favorable regulatory treatment for the drug. From 2011 to 2015, it finds that Alexion Russia made payments to Russian government health care officials to influence the regulatory treatment of and the budget allocated to Soliris while also increasing the number of approved prescriptions.
Alexion Turkey and Alexion Russia maintained false books and records of the improper payments. Alexion’s internal accounting controls were not sufficient to detect or prevent the false books. Furthermore, Alexion’s subsidiaries in Brazil and Colombia failed to maintain accurate books and records such as creating or directing 3rd parties to create inaccurate financial records regarding payments to patient advocacy organizations.
Without admitting or denying the SEC’s findings, Alexion agrees to cease and desist from committing violations of the books and records and internal accounting controls provision and to pay $14,210,194 in disgorgement, $3,766,337 in prejudgement interest, and a $3.5 million penalty.