Lilly In Advanced Talks To Resolve SEC Foreign Bribery Probe - WSJ.com

By Peter Loftus  Of DOW JONES NEWSWIRES

Drug maker Eli Lilly & Co. (LLY) is in advanced discussions with the Securities and Exchange Commission to resolve an investigation into potential violations of a U.S. law prohibiting bribery of foreign officials, the company said.

The Indianapolis-based company's disclosure of the negotiations in an SEC filing Friday comes three weeks after health-care giant Johnson & Johnson (JNJ) agreed to pay more than $70 million to settle U.S. and U.K. allegations that it paid bribes to doctors in three European countries, as well as kickbacks to Iraq to illegally obtain business under former leader Saddam Hussein.

U.S. authorities have stepped up enforcement of the Foreign Corrupt Practices Act, or FCPA, which bars U.S. companies from bribing foreign officials to obtain or retain business. Other U.S.-based multinational drug makers, including Merck & Co. (MRK), have received inquiries from the government in recent years regarding their activities in foreign countries.

Drug makers can run afoul of FCPA overseas because sales and marketing employees interact with physicians who are employed by government-owned entities, and thus may be considered to be officials in the eyes of U.S. authorities.

Lilly, maker of antipsychotic Zyprexa and erectile-dysfunction treatment Cialis, previously disclosed it was notified in 2003 that the SEC was probing whether the Polish divisions of certain drug makers including Lilly had violated the FCPA.

The probe eventually widened to include Lilly's activities in other countries, which the company hasn't identified. The SEC has issued subpoenas requesting documents, and the Justice Department also has asked Lilly to provide information about activities in certain countries, Lilly said.

"We are in advanced discussions with the SEC to resolve their investigation," Lilly said in its regulatory filing.

via online.wsj.com

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