Embattled Teva fined NIS 75m. for bribing foreign officials
This comes as the company is laying off thousands of workers in an effort to balance its books
By MAX SCHINDLERUpdated: JANUARY 31, 2018 13:39A TEVA Pharmaceutical Industries building is seen in Jerusalem last year. (Ammar Awad/Reuters)(photo credit: AMMAR AWAD / REUTERS)
Israeli drugmaker Teva Pharmaceutical Industries will be fined NIS 75 million ($22m.) for bribing foreign officials in a settlement reached with the Justice Ministry, it was announced on Monday.Teva, which is the largest Israeli company by market value, paid millions of dollars over the course of a decade to public officials in Russia, Ukraine and Mexico to promote its drugs.Many of the improper payments were presented as legitimate business expenses and led the company to make profits of at least $220m. off of its unscrupulous practices.The settlement in Israel followed a deferred prosecution agreement with US law enforcement for violating the Foreign Corrupt Practices Act reached in December 2016, in which the company paid $519m. in fines.The settlement signed Sunday spares the company possible criminal proceedings but does not protect individuals from prosecution. It requires Teva to admit all charges and pay the fine within two months. This comes as the company is laying off thousands of workers in an effort to balance its books.The agreement refers to Teva’s current financial woes, that it already paid a half-billion dollar fine to the US authorities, and that the company has fully cooperated with law enforcement.“As a global company, the company’s current criminal conviction could cause significant damages,” the State Attorney’s agreement stated, adding that authorities were “taking into consideration its current financial situation and the efficiency measures it is undertaking.”Teva said that none of its employees who were involved in making the bribes were still with the company and that the Israeli settlement was based on the 2016 US investigation.“All employees that had been willfully involved in the wrongdoing are no longer employed by the company,” a Teva spokeswoman said in a statement. “The investigation and today’s resolution are not due to new facts, but rather relate to facts that were subject to FCPA resolution with the US authorities in 2016.”Teva added, without a hint of irony: “It should be noted that after the company learned of the US investigation, it has implemented a robust compliance and enforcement program with very high standards designed to protect it and its subsidiaries from future violations.”
The Israeli company headquartered in Petah Tikva fell on hard times as shifting regulatory winds in the US opened the market to many more generic drug imports. At the same time, the US Food and Drug Administration approved a major competitor’s drug to Teva’s blockbuster Copaxone, for the treatment of multiple sclerosis.The agreement with the Justice Ministry comes one month after Teva announced plans to lay off 14,000 employees worldwide, and one in four workers – around 1,700 people – in Israel. The company also plans to divest assets and shrink its drug portfolio.The world’s largest generic drugmaker, Teva is burdened by a major $32b. debt load after its ill-advised purchase of Allergan’s generic drug unit in 2016.The company has a market value of $22.4b. and its stock price has gone up since CEO Kare Schultz took the helm in November.
