The world's largest pharmaceutical companies are facing a corruption investigation in the United States over claims that the hospitality lavished on those who prescribe their treatments could constitute bribery.
Britain's two biggest drug groups, GlaxoSmithKline (GSK) and AstraZeneca, are among those facing the investigation, which is being carried out jointly by the Department of Justice (DoJ) and Securities and Exchange Commission (SEC). The investigation is thought to centre around allegations that drugs companies might have contravened the Foreign Corrupt Practices Act (FCPA), which limits their ability to spend on such "soft' inducements" as hospitality, charitable donations and other non-business activities.
The list of the companies under investigation contains many of the global pharma industry's biggest names: Pfizer, Bristol-Myers Squibb and Eli Lilly are among those under the spotlight.
The DoJ is looking into claims that the industry has for years ignored obligations under anti-bribery legislation, and that the situation is so stark, some of the hospitality extended to those that buy treatments could amount to bribery.
The probe is into activities outside the US. If found guilty, the industry could face fines totalling millions of dollars.
Both GSK and AstraZeneca acknowledged the investigation yesterday. It is understood that GSK received a letter at the end of April, which said that the DoJ was making preliminary inquiries under the FCPA.
"GSK confirms that investigations by the US Department of Justice and the Securities and Exchange Commission regarding the sales and marketing of pharmaceutical products outside of the USA have commenced," the group said in a statement. "These inquiries relate to the USA Foreign and Corrupt Practices Act. GSK has been contacted by these agencies in this context and is helping with the preliminary inquiries."
A spokesman for AstraZeneca, said: "AstraZeneca plc has received inquiries from the US Department of Justice and the Securities and Exchange Commission in connection with an investigation into Foreign Corrupt Practices Act issues in the pharmaceutical industry. AstraZeneca is cooperating with their inquiries."