Big Pharma Has a Unique Vulnerability to FCPA Violations

The Justice Department (DOJ) is nearly a year into a major sweep of the pharmaceutical industry for Foreign Corrupt Practices Act (FCPA) violations. Although the investigation has been low-profile so far--no charges have yet been filed--the effort has the potential to change the way drug and medical device companies do business.

"This is a huge deal because of the number of clinical trials run abroad and the percentage of drugs that are approved in the U.S. that derive from those trials," says Glen Donath, a partner at Katten Muchin Rosenman.

"This is a confluence of two larger trends," Donath says. "You have the overall reassessment of the pharma/device-physician relationships. You also have very ramped-up FCPA enforcement over the past 10 years."

As prosecutors have dedicated increasing time and resources to foreign corruption in recent years, they have built a strong network both domestically and abroad. Now they are joining forces with health care fraud prosecutors to put the screws to the pharmaceutical industry.

Contributing Author

Steven Andersen

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