A complaint by the US Securities and Exchange Commission, filed in the District Court for the District of Columbia, claimed that Lilly made improper payments under the Foreign Corrupt Practices Act to officials in Russia, Brazil, China and Poland, reports the Legal Times.

Spa treatments

In response to the watchdog’s complaint, Lilly did not admit or deny the allegations, but said it ‘believes that this civil settlement brings resolution to issues from the past and is in the best interest of the company.’
The $29.4m settlement marks the end of a long investigation which lasted from 1994 until 2009, with Lilly first being notified in 2003.
The SEC claimed that Lilly's Russian subsidiary used offshore ‘marketing agreements’ as a method to ‘pay millions of dollars to third parties chosen by government customers or distributors’, while in China company employees allegedly falsified expense reports and used the money to pay for spa treatments, jewellery, and other improper gifts and cash payments to government-employed physicians.

Bribes

In Brazil, the company allegedly ‘allowed one of its pharmaceutical distributors to pay bribes to government health officials to facilitate $1.2 million in sales of a Lilly drug product to state government institutions’, while in Poland payments were made to a charity run by a health official ‘in exchange for the official's support for placing Lilly drugs on the government reimbursement list.’
Lilly was represented by William Baker, a partner at Los Angeles law firm Latham & Watkins.