On 5 October 2015, the United States Securities and Exchange Commission (SEC) announced that it had accepted an offer of settlement from the pharmaceutical company Bristol-Myers Squibb (BMS), in relation to breaches of the Foreign Corrupt Practices Act (FCPA).
The settlement relates to BMS’s failure to design and maintain effective internal controls on its interactions with healthcare providers (HCPs) at state-owned and controlled hospitals in China. The SEC found that sales representatives of a Chinese joint venture co-owned by a BMS subsidiary had offered corrupt inducements to HCPs in order to generate sales. The SEC also found that the BMS subsidiary had, over a period of four years, identified numerous irregularities and red flags but had failed to respond effectively.
BMS agreed to pay approximately $14.7 million in disgorgement of profits, interest and penalties. BMS also undertook to submit periodic reports to the SEC, over the course of the next two years, regarding the status of its compliance measures and FCPA remediation programme.