Boston based Alexion Pharmaceuticals pays $21.5 million to settle charges of foreign bribes in Turkey, Russia and Brazil to sell their drugs

Boston-based Alexion pharmaceutical company, agreed to pay $21.5 million to settle charges it violated the Foreign Corrupt Practices Act (FCPA). A settlement, announced by the Securities and Exchange Commission (SEC), alleges that the company’s foreign subsidiaries in Turkey and Russia paid government officials to promote their drugs and that their Brazilian and Columbian subsidiaries contracted third parties to create inaccurate financial records. Alexion’s internal accounting service either did not detect these misappropriations or did not report them. The complaint revolves mostly around bribes paid for better treatment of Alexion’s flagship drug Soliris. Soliris is an immunosuppressant drug used to treat patients with rare and life-threatening immune system disorders.

According to the SEC’s order, two Alexion subsidiaries made payments to foreign government officials to secure favorable treatment for Alexion’s primary drug, Soliris. The order finds that, from 2010 to 2015, Alexion Turkey paid Turkish government officials to improperly influence them to approve patient prescriptions and provide other favorable regulatory treatment for Soliris. The order similarly finds that from 2011 to 2015, Alexion Russia made improper payments to Russian government health care officials to favorably influence the regulatory treatment of and the budget allocated to Soliris as well as to increase the number of approved Soliris prescriptions. Alexion Russia and Alexion Turkey maintained false books and records of these improper payments, which Alexion’s internal accounting controls were not sufficient to detect or prevent. Further, the order finds that Alexion’s subsidiaries in Brazil and Colombia failed to maintain accurate books and records, including by creating or directing third parties to create inaccurate financial records concerning payments to patient advocacy organizations.

“Alexion’s internal accounting controls failed to detect and prevent payments to foreign government officials by its subsidiaries,” said Melissa Hodgman, an Associate Director in the SEC’s Division of Enforcement. “Companies in frequent contact with foreign officials need to ensure that their internal controls appropriately address such risks.”

Without admitting or denying the SEC’s findings, Alexion agreed to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay $14,210,194 in

Alexion Turkey allegedly bribed Turkish government officials to approve patient subscriptions for Soliris and to receive better regulatory treatment. Allegations against Alexion Russia accuse it of bribing officials to increase the total prescriptions of Soliris and to increase the government’s budget for the drug. The Brazilian and Columbian subsidiaries of Alexion allegedly failed to maintain their accounting records to a high standard, which is often a way to conceal bribes or kickbacks to officials or other illicit activity.

Jeffrey Newman’s firm represents whistleblowers nationwide including SEC whistleblowers on various issues. He can be reached by email at jeff@jeffnewmanlaw.com or by calling 978-880-4758.