A federal investigation that Alexion Pharmaceuticals settled for $21.5 million last week found the drugmaker paid bribes to Turkish and Russian government officials to gain favorable regulatory treatment for its blockbuster drug Soliris, according to details released by the SEC. Alexion’s disclosure states: “In May 2015, we received a subpoena in connection with an investigation by the Enforcement Division of the Securities and Exchange Commission (SEC) requesting information related to our grant-making activities and compliance with the Foreign Corrupt Practices Act (FCPA) in various countries. The company said the DOJ in October asked for the voluntary production of documents related to the investigation. To continue reading, please Sign In or Join at the top of this page. In fact, for most of the time, the consultant provided little to no explanation for many expenses, including vague descriptions such as ”other expense.”  In some cases, the consultant listed the first name of the government official on specific expense reports or notes attached thereto. The investigation started in 2015, according to the company’s earlier SEC filings. Alexion is best known for its development of Soliris, a drug used to treat the rare blood and kidney disorders. An internal document stated that Alexion hoped to “receive support to include [ultra-rare diseases treated by Alexion drugs] in all possible lists.”  After making the payments to Physician C and his organization, an Alexion employee stated that Physician C “cooperated” with Alexion Russia on the “programs within [Physician C’s] influence on regions in terms of standards and funding, through [Physician C’s] specialized committee.”. “Alexion’s internal accounting controls failed to detect and prevent payments to foreign government officials by its subsidiaries,” said Melissa Hodgman, an Associate Director in the SEC’s Division of Enforcement. Notwithstanding the pandemic and remote working arrangements, the Alexion Pharmaceuticals settles FCPA investigation. During the time period of 2010 to 2015, Alexion paid the consultant over $1.3 million, consisting of consulting fees and purported expense reimbursements. In 2014 and 2015, the same manager and an employee in Alexion Brazil submitted grant requests to Alexion’s global grant review committee that misstated how the requested funds would be allocated to the different activities covered in the grant request. Alexion Pharmaceuticals reached US$21 million settlement with SEC over fraud charges. Independent Investment Research Focused on Public Company Interactions with the SEC. Physician A provided Alexion with a copy of draft diagnostic standards and solicited Alexion’s comments on the standards. Alexion is a global pharmaceutical company. Red Flags That May Indicate You Might be at Risk of Violating FCPA, Sidebars — Reflections on White Collar Law and Federal Crimes. 5 Flickr 6LinkedIn 7 Pinterest 8 Email Updates. Boston-based Alexion Pharmaceuticals has resolved alleged violations of the Foreign Corrupt Practices Act after a five-year investigation. Preliminary discussions have begun with the SEC to resolve the investigation. Free email alerts anytime we publish. According to the SEC… Terms of the agreement took into account remedial acts undertaken by Alexion and its co-operation with SEC officials, according to the order. To assist with the patient approval process, Alexion hired a consultant, primarily because of the consultant’s connections to top Turkey Ministry of Health officials. Without admitting or denying the SEC’s findings, Alexion agreed to pay a $3.5 million penalty, plus $14.2 million in disgorgement and about $3.8 million in prejudgment interest. The SEC’s investigation was conducted by Christina McGill and Brittany Hamelers. Rajan violated his confidentiality obligations to Alexion by trading Synageva stock based on nonpublic information concerning the transaction, reaping over $10,000 in illicit profits. Its Audit and Finance Committee stepped up to lead the investigation in conjunction with some outside advisers, and Alexion also held off on making its Q3 regulatory filing with the Securities … As previously disclosed, Alexion first received a subpoena in May 2015 concerning an investigation by the SEC’s Enforcement Division “requesting information related to our grant-making activities and compliance with the FCPA in various countries.” The Probe. In its latest action, the SEC settled with Alexion Pharmaceuticals for $21 million for foreign bribery and books and records violations. From 2011 to 2015, Alexion paid over $1 million to these HCPs, which included funds to ensure that the HCPs took positions favorable to Alexion in connection with regional budget allocations, to increase prescriptions and to favorably influence regulatory treatment of Soliris. Today, it was announced that Alexion finalized its settlement with the U.S. Securities and Exchange Commission (SEC) to resolve the previously disclosed investigation related to the company’s compliance in certain countries with the Foreign Corrupt Practices Act (FCPA) and other applicable laws. According to the SEC’s order, two Alexion subsidiaries made payments to foreign government officials to secure favorable treatment for Alexion’s primary drug, Soliris. Pharmaceutical company Alexion is in “preliminary discussions” with the SEC to resolve a foreign bribery investigation. Notwithstanding the pandemic and remote working arrangements, the Securities and Exchange Commission is continuing to bring FCPA enforcement actions. In its latest action, the SEC settled with Alexion Pharmaceuticals for $21 million for foreign bribery and books and records violations. Alexion paid HCPs in Russia who were employed at government institutions for services, including research, consu;ting on specific topics and hosting educational events. In its May 2020 annual report filed with the United States Securities and Exchange Commission (SEC), Alexion Pharmaceuticals, Inc., said it reached an agreement in principle with the SEC to resolve the Foreign Corrupt Practices Act (FCPA) investigation against it.. An SEC investigation determined that Vijay S. Rajan of Bolingbrook, Illinois learned about the impending transaction in April 2015, through his work as an information technology executive at Alexion. The Securities and Exchange Commission today announced that Boston-based pharmaceutical company Alexion Pharmaceuticals Inc. has agreed to pay more than $21 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). These payments were inaccurately reported as honoraria and grants. Some examples of Alexion’s illegal payment schemes include: In 2011 and 2012, Alexion targeted Physician A because Physician A was the chair of the committee that prepared recommendation on allocation of rare disease funds in one region of Russia and because Physician A was assigned to propose medical standards to diagnose and treat PNH. From 2013 to 2015, Alexion Brazil and Alexion Colombia directed third parties to create inaccurate financial records concerning payments to third parties, including patient advocacy organizations (“PAOs”). Note: The content provided by Michael Volkov on the Corruption, Crime & Compliance blog is not intended to be legal advice and viewing the materials does not create an attorney-client relationship. Without admitting or denying the SEC’s findings, Alexion agreed to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay $14,210,194 in disgorgement, $3,766,337 in prejudgment interest, and a $3.5 million penalty. Alexion entered the Russia market in 2012. Sign In or Become a Subscriber! Submitted by Probes Reporter on Thu, 2018-06-14 06:05. Alexion paid both physicians in significant part to influence them in favor of Soliris. Keep up to date with significant developments in the corporate investigations world. Without admitting or denying the SEC’s findings, Alexion agreed to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay $14,210,194 in disgorgement, $3,766,337 in prejudgment interest, and a $3.5 million penalty. The investigation was supervised by Timothy England and Melissa Hodgman. Alexion increased the number of patient approvals, and gained access to confidential information and advance feedback on regulatory submissions. Alexion is cooperating with these investigations. Soliris sold through a national patient system and was reimbursed through regional healthcare spending. The SEC’s investigation was conducted by Christina McGill and Brittany Hamelers. Stay Informed. N.W. In May this year, Alexion said it received a declination from the DOJ for the FCPA investigation. Alexion unveiled the proposed $25 million settlement in its recent quarterly securities filing. The order finds that, from 2010 to 2015, Alexion Turkey paid Turkish government officials to improperly influence them to approve patient prescriptions and provide other favorable regulatory treatment for Soliris. The investigations have focused on operations in various countries, including Brazil, Colombia, Japan, Russia and Turkey, and Alexion’s compliance with the FCPA and other applicable laws. Pharmaceutical company Alexion is in “preliminary discussions” with the SEC to resolve a foreign bribery investigation. 2020-05-07T14:19:00Z. Soliris is approved for use in more than 50 countries. Alexion Pharmaceuticals Strikes Tentative $25 Million Bribery Settlement The biopharmaceutical company has reached a settlement in principle with the SEC, it said. Further, an Alexion Turkey manager directed that the description of the consultant’s claimed expenses should be written in pencil so that they could change or conceal the expenses. Yesterday, the SEC announced that Alexion Pharmaceuticals (a company that has been under scrutiny since mid-2015) agreed to approximately $21.5 million to resolve an enforcement action based on the actions of foreign subsidiaries involving the company’s primary drug Soliris. On one occasion in 2014, in order to provide funds to a PAO, an Alexion Colombia senior manager directed a PAO to submit an invoice that falsely described that the funds would be used for “legal support” services. Alexion nears $25M settlement with SEC in FCPA probe. At the same time, Pharma opened a court case against Alexion Pharma Belgium. The Boston-based company settled the claims without admitting or denying the regulator’s findings. Alexion Pharmaceuticals, Inc. - SEC Investigation Update. A federal investigation that Alexion Pharmaceuticals settled for $21.5 million last week found the drugmaker paid bribes to Turkish and Russian government officials to gain favorable regulatory treatment for its blockbuster drug Soliris, according to details released by the SEC. The investigation started in 2015, according to the company’s earlier SEC filings. For example, from 2012 to 2014, Alexion paid over $15,000 to an HCP who was decision maker for reimbursement criteria for aHUS and for patient prescriptions for Soliris. ... is the hub for global coverage of corporate investigations and their aftermath. 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. Alexion is a global pharmaceutical company. Alexion earned a total of over $14 million in unjust profits. Subscribe now. The consultant used a portion of these funds to provide government officials with cash, meals and gifts to secure favorable treatment for Soliris. Alexion Russia and Alexion Turkey maintained false books and records of these improper payments, which Alexion’s internal accounting controls were not sufficient to detect or prevent. This inaccurate invoice allowed Alexion Colombia to approve the payment locally instead of obtaining approval for the payment through the global grant process, as required by Alexion’s policies. It says the company’s co-operation included providing regular briefings on the facts developed in the internal investigation and forensic accounting review Alexion undertook, and identifying and providing translations of key documents. Without admitting or denying the SEC’s findings, Alexion agreed to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay $14,210,194 in disgorgement, $3,766,337 in prejudgment interest, and a $3.5 million penalty. Alexion engaged in bribery in Turkey and Russia, and accounting violations in Brazil and Colombia. 2200 Pennsylvania Avenue, To see what you're missing. The HCPs were responsible for approving or denying patient prescriptions for Soliris and were key influencers on regulatory matters such as treatment guidelines and reimbursement. On July 2, 2020, Alexion Pharmaceuticals, Inc., a Massachusetts-based pharmaceutical company, agreed to pay $21.5 million to the US Securities and Exchange Commission to resolve charges that it had violated the books and records and internal controls provisions of the US Foreign Corrupt Practices Act. For example, in 2013 and 2014, an Alexion Brazil manager caused a PAO to pay for the manager’s personal expenses for alcohol and personal travel, and to submit a fictitious invoice, which was reimbursed by Alexion Brazil. The information found on our website is not part of this or any other report we file with, or furnish to, the SEC. The Continued Evolution of Best Practices for Compliance Programs! Notably, both subsidiaries failed to maintain certain documents underlying a substantial number of financial transactions. The order similarly finds that from 2011 to 2015, Alexion Russia made improper payments to Russian government health care officials to favorably influence the regulatory treatment of and the budget allocated to Soliris as well as to increase the number of approved Soliris prescriptions. Additionally, Alexion was cited because some of its employees in Brazil destroyed documents after an internal investigation was initiated. But from then forward, Alexion did cooperate with the investigation and boosted its compliance efforts substantially. Washington D.C., July 2, 2020 —. Alexion did not elaborate on the nature of the investigation. From 2011 to 2015, Alexion paid Physicians B and C for honoraria, research and education expenses, and in grants to the institution that employed Physician C.  Physicians B and C were geneticists and chief advisors to the Ministry of Health.
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