Novartis: “Zero Tolerance” Bribery Policy

In the wake of a spate of fines and sanctions against drug-makers and the embarrassing headlines that follow, Novartis has issued a stern and highly public message to its employees. The message, although carefully worded, is clear: “Bribery will not be tolerated here”

The move comes just three weeks after Pfizer was charged with violating the Foreign Corrupt Practices Act. Apparently Pfizer employees and agents in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia made improper payments to foreign officials to obtain regulatory and formulary approvals, sales and increased prescriptions for its medicines. Worse still, they tried to conceal the bribes by improperly recording payments in accounting records as legitimate expenses for promotional activities, marketing, training, travel and entertainment, clinical trials, freight, conferences, and advertising.

Pfizer is by no means alone. Earlier this year, Teva Pharmaceuticals and Bristol-Myers Squibb received subpoenas in relation to overseas bribery. And last year, Johnson & Johnson was fined $70 million for bribing European doctors and paying kickbacks to Iraq to illegally obtain business.

Clearly David Epstein, who heads Novartis Pharmaceuticals has been taking note. In a recent blog post he states that the company has “zero tolerance for bribery – it’s illegal, unethical and goes against the integrity and transparency we stand for.”

To ensure every Novartis employee fully understands what bribery is and how to avoid it, they’ve developed an updated version of their Global Anti-Bribery Policy.

This does not introduce new standards, but is meant to clarify, with simple language, the principles already set forth in our Code of Conduct, focusing on day-to-day situations where bribery issues may arise. This includes guidance on ensuring third parties we engage for certain common business activities operate under similar standards and principles as we do,” continues Epstein.

And just so everyone is completely clear, the policy spells it out: “Employees must not bribe and they must not use intermediaries, such as agents, consultants, advisers, distributors or any other business partners to commit acts of bribery. Novartis does not distinguish between public officials and private persons so far as bribery is concerned: bribery is not tolerated, regardless of the status of the recipient

While we applaud Novartis’s integrity, other commentators have been quick to point out that the Novartis missive amounts to little more than a smoke and mirrors.

Pharmalot’s Ed Silverman called it a smart legal move. He observes that should any trouble arise later, Novartis can point to its efforts to spell out specifics to employees.

What do you think?

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