Risk & Compliance

Alexion Fined $21M in Foreign Corruption Probe

The SEC says the biotech firm made improper payments to Turkish and Russian officials to secure favorable treatment for its main drug.
Matthew HellerJuly 3, 2020

Biotech firm Alexion has agreed to pay more than $21 million to settle charges that it bribed Turkish and Russian officials to secure favorable treatment for its main drug.

The U.S. Securities and Exchange Commission said the alleged misconduct lasted from 2010 to 2015 and unjustly enriched Alexion by more than $14 million.

The company paid Turkish government officials to improperly influence them to approve prescriptions for its Soliris drug and made similarly improper payments to Russian officials, including an individual identified as Physician A who chaired a committee that made recommendations for the allocation of rare disease funds in one region of Russia, the SEC said in an administrative order.

Soliris, which Alexion began selling in Turkey in 2009 and in Russia in 2012, is used to treat a rare chronic blood disease called atypical hemolytic uremic syndrome.

To settle the SEC’s charges of violations of the Foreign Corrupt Practices Act, Alexion agreed to pay $14,210,194 in disgorgement, $3,766,337 in prejudgment interest, and a $3.5 million penalty.

“Alexion’s internal accounting controls failed to detect and prevent payments to foreign government officials by its subsidiaries,” Melissa Hodgman, an associate director in the SEC’s Division of Enforcement, said in a news release. “Companies in frequent contact with foreign officials need to ensure that their internal controls appropriately address such risks.”

According to the SEC, Alexion initially struggled to get prescription approvals for Soliris in Turkey. But after a senior Ministry of Health official suggested to an Alexion regional manager that the company make payments to government officials, it hired a consultant to help it with the approval process.

From 2010 to 2015, the SEC said, Alexion Turkey paid the consultant more than $1.3 million, a portion of which the consultant passed on to Turkish government officials in the form of cash, meals, or gifts.

In Russia, Alexion allegedly paid Physician A about $100,000 to influence the regional health budget and regulatory standards in favor of Soliris. “Patients requiring Soliris treatment were allocated 52% of the regional Ministry of Health budget in Physician A’s region in 2013,” the SEC noted.