Merck Probed for Corrupt Foreign Practices

Merck & Co. (Whitehouse Station, NJ) has received letters from the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) seeking information about “activities in a number of countries” with reference to the Foreign Corrupt Practices Act. The Act makes it unlawful for US companies to bribe foreign government officials to obtain or retain business. Merck disclosed the information in a filing with the SEC and has said it is cooperating with the agencies and their requests.
 
Although the company has released no further details of the probe, third-party reports including The Wall Street Journal and Law360 stated that a spokesperson for Merck has said that it has not been charged for violating the Act and has a compliance program in place to prevent such occurrences. On its website, Merck explains that it operates under a federal Corporate Integrity Agreement, which requires it to retain an independent review organization to “conduct a systems review of its promotional policies and procedures and to conduct, on a sample basis, transactional reviews of Merck's promotional programs and certain Medicaid pricing calculations.” The company is also required to provide regular reports and certifications to the US Department of Health and Human Services Office of Inspector General regarding its compliance with the integrity agreement.
 
In the SEC filing, Merck also added that it believes the inquiry is “part of a broader review of pharmaceutical industry practices in foreign countries.” According to a report from Main Justice, the DOJ and the SEC have investigated several pharmaceutical companies for potential violations of the Foreign Corrupt Practices Act.