For insights into how Foreign Corrupt Practices Act (FCPA)
enforcement is creeping into the pharmaceutical and medical device
manufacturer arena, see this
article, which I co-authored with
Paul Pelletier, former principal deputy chief of the Criminal
Division's Fraud Section at the Department of Justice (DOJ). It
discusses how DOJ is now using "letters of inquiry" and
other informal practices to get pharmaceutical companies to report
their knowledge of their competitors' fraudulent activities to
the government as a condition of resolving an investigation.
On March 26th, a few days before the article published, another
device manufacturer, Biomet, Inc., announced that it entered into a new Deferred Prosecution Agreement (DPA) and
accompanying settlements with DOJ and the Securities and Exchange
Commission. Coupled with the DPAs DOJ entered into with Johnson & Johnson in April 2011 and Smith & Nephew in February 2012, this
announcement signals the fact that DOJ apparenlty is looking beyond
United States' boundaries for health care fraud enforcement
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The increasing focus on enforcement of the US Foreign Corrupt Practices Act (FCPA), Canadian Corruption of Foreign Public Officials Act and UK Bribery Act, as well as similar anti-corruption laws around the globe, has made conducting pre-acquisition anti-corruption due diligence an essential element of any cross-border merger or acquisition, especially if the target does business in a jurisdiction where local officials may expect to be compensated for simply doing their job.
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