First Published: 2017-02-08

Israel probing pharma giant suspected of bribing officials
Drugmaker giant Teva says Israeli police probing company for allegedly bribing officials, just two months after it settled $519 million similar case in US.
Middle East Online

Teva bribed Russian official to boost sales

JERUSALEM - Pharmaceutical giant Teva said on Wednesday it is under investigation by Israeli police for suspected bribery of foreign officials just two months after it paid $519 million to settle US charges.

The news came a day after the world's biggest manufacturer of generic drugs said in a surprise announcement that its CEO was quitting after just three years at the helm.

"An investigation is being conducted in Israel regarding the same issues which led to a settlement with American justice authorities," a company statement said.

In December, Teva agreed to pay US authorities $519 million to settle charges that it paid bribes to foreign officials to win business in Russia, Ukraine and Mexico.

It promised to enhance its compliance programme after its Russia subsidiary pleaded guilty to one count of the Foreign Corrupt Practices Act and it signed off on a deferred prosecution agreement, the US Justice Department said at the time.

That case included bribes by Teva Pharmaceutical Industries to a "high-ranking Russian government" official who used his authority to boost sales of the Teva multiple sclerosis drug Copaxone, resulting in more than $200 million in profits for Teva and about $65 million for the Russian official, the Justice Department said.

US law permits anti-corruption sanctions against any company listed on Wall Street.

"The settlement referred to events that occurred between 2007-2012 and none of the people involved in the improper payments is currently employed at Teva," the company said on Wednesday, without commenting further on the Israeli investigation.

Police had no comment on the case.

Israel's Haaretz newspaper said, without citing sources, that the country's biggest business was suspected of earning "hundreds of millions of dollars" as a result of paying kickbacks and then falsifying documents to conceal its actions.

"According to the Israeli allegations, bribes in Russia and Mexico were concealed as discounts to clients. Bribes in Ukraine were allegedly concealed as marketing and sales expenses, or as consultation fees," the paper said.

Announcing CEO Erez Vigodman's resignation on Tuesday Teva said its chairman Yitzhak Peterburg would serve as interim chief executive.

It gave no reason for the change but Israeli media said the company took action after a series of recent decisions prompted investors to lose faith in Vigodman's leadership.

 

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