Alexion Pharmaceuticals Inc. agreed to pay more than $21 million to settle claims it bribed government officials to increase prescription drug sales in Turkey and Russia, the U.S. Securities and Exchange Commission said Thursday.
Alexion subsidiaries in those two countries paid officials to influence patient prescriptions and regulatory approvals of Soliris, a drug used to treat rare blood diseases, an SEC investigation found. The Boston-based company settled the claims without admitting or denying the regulator’s findings.
“Alexion is pleased to have reached a resolution and to have such a strong and effective compliance culture and program in place today,” the company said in a statement on its website.
The SEC’s findings paint a picture of bureaucratic health-care systems in Turkey and Russia filled with red tape and regulatory hurdles, which Alexion’s employees worked to overcome by building close relationships to public health-care officials through cash and gifts.
Alexion began selling Soliris in Turkey in 2009. Under Turkish law, each patient’s application to begin using the drug required approval by health-care providers appointed to a commission within Turkey’s Ministry of Health, separate approvals for prescription payments, and recurring approvals to continue treatment.
Alexion struggled to get the approvals, the SEC said, so it hired a consultant with connections to the Ministry of Health, whom it paid more than $1.3 million between 2010 and 2015. The consultant passed a portion of the funds along to government officials in the form of cash, meals and gifts, regulators said.
As a result, Alexion’s subsidiary in Turkey secured approvals for patient prescriptions, as well as confidential information and advanced feedback from government officials on regulatory submissions, the SEC said.
In Russia, Alexion employees identified certain state-employed health-care professionals who had influence over the allocation of regional budgets and regulatory decisions within the government health-care system, according to the SEC.
From 2011 to 2015, the company’s subsidiary in Russia made over $1 million in payments to these unnamed individuals, including to increase the number of approved Soliris prescriptions, it said.
The Alexion subsidiaries in Turkey and Russia took steps to hide the improper payments and recorded them in their financial records as legitimate expenses, including as costs for educational activities and scientific research, the SEC said.
The SEC said the misconduct violated provisions of the Foreign Corrupt Practices Act, an anti-bribery law, that require companies to maintain accurate books and records and internal controls that prevent such misconduct.
Alexion subsidiaries in Brazil and Colombia had also failed to maintain accurate books and records in an effort to cover up payments to patient advocacy groups, the SEC said, although it didn’t claim the payments qualified as bribes to government officials.
Alexion’s fine includes a $3.5 million civil penalty, as well as about $14.2 million in disgorgement, representing illicit profit from the activity, and about $3.8 million in interest on those profits, according to an administrative agreement reached Thursday.
The SEC credited the company for its cooperation and steps it took to strengthen its anti-corruption compliance program. It said the company had implemented a centralized system to track and monitor third-party payments.
The SEC’s probe into Alexion began around May 2015, when the company received a subpoena from the regulator.
The U.S. Justice Department also opened a separate criminal probe into Alexion’s compliance with the FCPA but informed the company this year that it had closed the inquiry.