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Pfizer Pays $60 Million for Bribing Foreign Doctors

Friday, August 10, 2012

Foreign subsidiaries of Pfizer spent years bribing foreign doctors and healthcare officials to expand sales of the company’s pharmaceuticals, according to a $60 million settlement reached with the U.S. government.

The deal, brokered by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice, resolves charges of illegal activities that took place in about a dozen countries, including China, Bulgaria, Croatia, Kazakhstan, and Russia.

“Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers,” Kara Brockmeyer, an SEC official, said in a news release. “These charges illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations.”

In China, a subsidiary awarded doctors with points for every Pfizer prescription they wrote, allowing them to redeem the points for medical books, cell phones, and other gifts. In some cases, Pfizer’s China operation bribed physicians with free trips abroad.

Pfizer officials in the U.S. reportedly learned of the bribes in 2004 and began in internal investigation that kept federal regulators in the loop on what they discovered. The company insisted its executives knew nothing about the schemes before then.


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Is this a concealed kickback?

When government agencies levy fines on corporate and banking cartels for fraudulent actions in the performance of their business it always appears to me as though they are actually participating in the crime and receiving a kickback.

There is always an agreement between the government agency like the DoJ or SEC or CFTC and the companies involved and a payoff to the government. The same thing happened when the Enron scam broke and all the Wall Street firms involved who were up to their oxters in the scam agreed to pay huge fines but no individual ever did any hard time like the Enron executives.

The victims of the crimes are never compensated for the fraud perpetrated against them. All the loot ends up in the coffers of the cartels or in the pockets of the regulators. I wonder if there are any bonuses involved for the most active invigilators. This might explain the rapid settlements/payoffs.

PS They used a very revealing phrase: "...The deal, BROKERED by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice". That sums it up nicely.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

The problem is that

The problem is that technically, the Enron executives didn't do the crime. "Enron" did the crime. And "Enron" doesn't realy exist. There isn't one or two owners; it is all the shareholders. Enron executives just work for the shareholders.

You could punish the shareholders, but they could legitimately argue that they had no idea such fraud was going on (especially since the vast majority got taken for a ride). Although from a free market perspective, this would work very well. If the law came after investors who invested in a company that engaged in fraud, you'd see companies that weren't clean drop like flies.

Even if you end up punishing Enron the company, you don't change behaviour. Enron loses some profits (to pay the fines), but executives keep all the millions they've made in the scam. Shareholders get scared off, but why would the executives care about the value of the stock? They already have their payday.

Fundamentally, executives are gambling with the money of shareholders, who are too stupid to realize what is going on. Moreover, investors nowadays are ridiculously short-sighted...they'd rather support an executive group that gives them a year or two of triple gains before a crash than a group that builds a company slowly but surely.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

The Enron executives are serving time or have served time.

The chairman of Enron Ken Lay died in 2006 but had been convicted and would be in prison were he alive. The CFO Andrew Fastow was convicted and served five years in prison 2006-2011. He collaborated with the prosecution and so received a lighter sentence. His wife serve six months. The COO Jeffrey Skilling is serving a sentence of 24 years in Federal prison and will be released in 2028 when he is 74 years old. Both men also paid multi million dollar fines.

Wall Street executives were instrumental in setting up the offshore entities that Enron used to hide losses. This made the Enron balance sheet look more robust than it actually was and helped to boost the stock price. These Wall Street executives collaborated with the Enron executives in promoting their stock and their offshore entities and earned large sums for doing so. They would also have profited enormously by shorting the stock when Enron fell apart and they would have had a unique position to know when to do this. None of them were ever sent to prison for the role they played. Had they gone to prison then it would have put a chill on the practices they were pursuing and that continue to be used to this day.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Pfizer malfeasance

I wish there was more depth to the coverage of this. Pfizer learned of bribes within its own organization and instead of putting a stop to it brought in federal regulators to help expose their own crimes and financial liability? It doesn't make sense. Am I missing something here?

When we try to pick out anything by itself, we find it hitched to everything else in the Universe.
~ John Muir