Will Overseas Bribery Target Come Off Biopharmas?


Past comments by President-elect Donald Trump are prompting some to think that his administration may lessen enforcement of laws prohibiting bribery of foreign officials.

The Foreign Corrupt Practices Act, enacted in 1977, generally prohibits paying bribes to foreign officials to assist in obtaining or retaining business. For the last five years, biopharmas have been in the cross-hairs of the Department of Justice and the Securities Exchange Commission, which jointly enforce the FCPA.

But in 2012, Trump said in an interview that the FCPA was a “horrible law.” It puts U.S. businesses at a disadvantage and “that should be changed,” he said.

What will Trump advocate once he is sworn in as president? Matthew Stephenson, a law professor at Harvard University, told me in an interview for my special report that he was more pessimistic than others.

"I don’t expect much to change in the short term, but I am concerned about the mid- and long-term. There is a tremendous amount of uncertainty,” he said.

I recall, when I was taking a course on international law, that my professor said, “There’ll come a time when your clients will tell you, ‘If we don’t pay a bribe to this official overseas, we won’t get the business. That’s the way they do things over there. We need the business.’ And you’ll have to make the right decision for them.”

The FCPA provides penalties for violations, with fines that have reached $25 million for one biopharma this past year. But what will the Trump administration do now?

Katie McDermott, a partner focusing on government enforcement and compliance for Morgan, Lewis & Bockius LLP, Washington, weighed in on what biopharma clients might expect to see. “There are many forecasts about how a change in administration may impact law enforcement. But like the weather, conventional wisdom does not always play out as expected.”

Michaeline Daboul, chief executive officer of the life sciences consulting company MMIS/MediSpend, noted that the FCPA is not the only game in town. “I don’t see companies pulling back from global compliance practices because there are other laws such as the U.K. bribery statute and those of other countries to deal with.”

As with so many things with a new administration, companies will have to follow trends and signs concerning the FCPA very carefully. You can read my complete special report here.

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