Israel's Teva Examining Claims Workers Bribed Healthcare Officials to Push Prescription Drugs

Tipster tells Israeli pharmaceutical giant Teva of alleged wrongdoing in Romania amid probe into other reported cases of bribery.

Ofer Vaknin

Teva Pharmaceutical Industries is investigating claims by an anonymous tipster that the company bribed state healthcare workers in Romania to get them to prescribe its medication, a Teva spokeswoman said.

The internal probe, which has not previously been reported, comes as the Israel-based company prepares to settle U.S. government investigations into alleged bribery in several other countries.

The spokeswoman confirmed the internal investigation was ongoing, but declined to comment on the allegations.

Teva launched the probe in 2015 after an anonymous tipster accused the company of paying Romanian doctors speaking and consulting fees and covering their international travel expenses.

An employee collects newly-manufactured pills from a machine at the tablet production plant at Teva Pharmaceuticals' headquarters in Jerusalem, September 19, 2011.
Adam Reynolds, Bloomberg

In exchange, the providers recommended Teva's multiple sclerosis drug Copaxone "to as many patients as possible,” the tipster wrote in a 2015 email sent to Teva's chief executive and audit committee, which was reviewed by Reuters.

For example, to make the speaking payments appear legitimate, the tipster alleged, Teva provided one doctor a short pre-written PowerPoint presentation to read at healthcare provider meetings. The tipster did not specify the amount of the alleged payments.

Copaxone generated $1.1 billion in sales last quarter, 19 percent of Teva’s total revenue, the company said last month in a regulatory filing.

Many doctors in Romania are considered state employees.

The U.S. Foreign Corrupt Practices Act makes it a crime to bribe foreign government officials to win business regardless of whether the payments are made directly or through other means such as extravagant entertainment or footing the bill for international travel.

Teva is traded on the New York Stock Exchange and also has U.S. subsidiaries.

It can sometimes be difficult for law enforcement to determine which expenditures are illegal efforts to influence officials, rather than legitimate ways to market a product.

The tipster told Teva the allegations were being sent to the Securities and Exchange Commission and the U.S. Department of Justice. Spokesmen for the Justice Department and the SEC declined to comment.

The allegations were laid out by the tipster in a series of emails to Teva's chief executive, audit committee and compliance staff between October 2015 and last month. The Teva spokeswoman confirmed that the company had received the emails, which prompted the company to open the internal investigation.

Teva has been in “advanced discussions” with the Justice Department and the SEC Commission to settle separate foreign bribery allegations regarding its practices in Russia, Mexico and Ukraine, the company said in a filing last month.

Teva has set aside $520 million for possible penalties, the filing said.

To address the issues, Teva said it has ended “problematic business relationships with third parties,” terminated relevant employees, overhauled management of some subsidiaries and pulled out of several countries, the company said.

U.S. authorities have been cracking down on foreign corruption in the pharmaceutical industry. In September, GlaxoSmithKline agreed to pay the SEC $20 million to settle allegations that it had bribed healthcare professionals in China to increase sales. The company did not admit or deny wrongdoing.