Documente Academic
Documente Profesional
Documente Cultură
(VARIOUSCOUNTRIES)
ELILILLYFCPAISSUES
(RUSSIA)
Lilly-Brazil negotiated the amount of the discount with the distributor based on the distributor's
anticipated sale. The discount to the distributors generally ranged between 6.5% and 15%, with
the majority of distributors in Brazil receiving a 1 0% discount.
23. In early 2007, at the request of one of Lilly-Brazil's sales and marketing
managers at the time, Lilly-Brazil granted a nationwide pharmaceutical distributor, unusually
large discounts of 17% and 19% for two of the distributor's purchases of a Lilly drug, which the
distributor then sold to the government of one of the Brazilian states. Lilly-Brazil's pricing
committee approved the discounts without further inquiry. The policies and procedures in place
to flag unusual distributor discounts were deficient. They relied on the representations of the
sales and marketing manager without adequate verification and analysis of the surrounding
circumstances of the transactions. In May 2007, Lilly sold 3,200 milligrams of the drug to the
distributor for resale to the Brazilian state; in August 2007, Lilly-Brazil sold 13,500 milligrams
of the drug to the distributor for resale to the Brazilian state. Together the sales were valued at
approximately $1.2 million.
24. The distributor used approximately 6% of the purchase price (approximately
$70,000) to bribe government officials from the Brazilian state so that the state would purchase
the Lilly product. The Lilly-Brazil sales and marketing manager who requested the discount
knew about this arrangement.
Russia
25. From 1994 through 2005, Lilly-Vostok, a wholly-owned subsidiary of Lilly, sold
pharmaceutical products either directly to government entities in the former Soviet Union or
through various distributors, often selected by the government, who would then resell the
products to the government entities. Along with the underlying purchase contract with the
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government entity or distributor, Lilly-Vostok sometimes entered into another agreement with a
third-party selected by a government official or by the government-chosen pharmaceutical
distributor. Generally, these third-parties, which had addresses and bank accounts located
outside of Russia, were paid a flat fee or a percentage of the sale. These agreements were
referred to as "marketing" or "service" agreements. In total, Lilly-Vostok entered into over 96
such agreements with over 42 third-party entities between 1994 and 2004.
26. Lilly-Vostok had little information about these third-party entities, beyond their
addresses and bank accounts. Rarely did Lilly-Vostok know who owned them or whether the
entities were actual businesses that could provide legitimate services. Senior management
employees in Lilly-Vostok's Moscow branch assisted in the negotiation of these agreements.
The contracts themselves were derived from a Lilly-Vostok-created template and enumerated
various broadly-defined services, such as ensuring "immediate customs clearance" or
"immediate delivery" of the products; or assisting Lilly-Vostok in "obtaining payment for the
sales transaction," "the promotion of the products," and "marketing research."
27. Contrary to what was recorded in the company's books and records, there is little
evidence that any services were actually provided under any of these third-party agreements.
Indeed, in many instances, the "services" identified in the contract were already being provided
by the distributor, a third-party handler (such as an international shipping handler) or Lilly itself.
To the extent services such as expedited customs clearance or other services requiring interaction
with government officials were provided, Lilly-Vostok did not know or inquire how the third-
party intended to perform their services.
28. Contemporaneous documents reflect that Lilly-Vostok employees viewed the
payments as necessary to obtain the business from the distributor or government entity, and not
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as payment for legitimate services. For example, in November 1994, a senior manager at Lilly-
Vostok emailed the commercial manager, the employee tasked with drafting and approving the
language of the agreements, that the "standard Marketing Agreement [is] where the [service
provider] delivers the service of getting this [purchase] contract for us .... " In August 1999, the
commercial manager emailed senior managers that "if real services are provided the marketing
agreement is not the appropriate form." In other documents, Lilly-Vostok employees referred to
the payments as "discounts" or "commissions" to the distributor or government purchaser.
29. In 1997, Lilly conducted a business review of Lilly-Vostok to identify business
risks and assess the subsidiary's policies and procedures which resulted in a report. The report,
which was sent to Lilly-Vostok offices in Geneva and to Lilly headquarters in Indianapolis,
noted that "[b]usiness ethics [in Russia] are low" and that "[a] large base of opportunistic
entrepreneurs, lacking national presence build the distribution network." The report concluded
that "[t]he nature and complexity of customers require that 'consultants' be used to 'support'
activities, leading to agreement signing" (quotation marks in the original). The report pointed
out that the services provided by these consultants were broadly defined and duplicated activities
usually performed by Lilly-Vostok's Russian staff, and that documentation of the services
received was not available. The report recommended that Lilly-Vostok modify its internal
controls to ensure that the services were documented and Lilly-Vostok was getting "value."
30. In 1999, Lilly again reviewed Lilly-Vostok's operations, including its use of
marketing agreements and concluded that they raised concerns. A second report, which was sent
to Geneva and Indianapolis headquarters and distributed to, among others, the individuals who at
that time were Lilly's Chief Financial Officer, President of Lilly International Operations and
General Auditor, stated that:
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Attention has been given to contain external unethical pressures through
guidelines and training. The use of marketing agreements with third-
parties has been tightened; agreements substance and permanent education
program continue to require effort and refinements.
31. Regarding the agreements, the second report concluded that the "[ n ]eed exists to
call on third-parties to create sales potential." It recommended that Lilly-Vostok modify its
internal controls to assure itself that the agreements accurately and fairly reflect the services to
be provided.
32. Lilly did not curtail the use of marketing agreements by its subsidiary or make
any meaningful efforts to ensure that the marketing agreements were not being used as a method
to funnel money to government officials, despite recognition that the marketing agreements were
being used to "create sales potential" or "to 'support' activities leading to agreement-signing"
with government entities. In fact, during the 2000-2004 period -- after the above-described
reports, but prior to the company ending use of the agreements-- Lilly-Vostok entered into the
three most expensive of these arrangements.
33. For example, in 2002, the Russian Ministry of Health announced that it would
engage in a "federal tender" in which it would purchase drugs for the treatment of diabetes to be
provided free of charge to patients by the government. Under the terms of the tender, the
ministry selected a large Russian pharmaceutical distributor from which to purchase the
products, and this distributor, in tum, negotiated with Lilly-Vostok for the purchase of diabetes
products for resale to the Ministry of Health.
34. The large Russian pharmaceutical distributor was owned and controlled by a
wealthy and prominent Russian businessman. The Russian pharmaceutical distributor required
Lilly-Vostok, as a condition of their agreement, to enter into a "Storage and Delivery
Agreement" with an entity incorporated in Cyprus. In July 2002, Lilly-Vostok executed the
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purchase agreement with the distributor, which was signed on the distributor's behalfby its
chairman, the Russian businessman. At approximately the same time, Lilly-Vostok
also entered into the "Storage and Delivery Agreement" with the entity in Cyprus.
35. Lilly's due diligence regarding the entity in Cyprus was limited to ordering a Dun
and Bradstreet report and conducting a search using an internet service to scan publicly available
information. Neither the Dun and Bradstreet report nor the internet search revealed the Cyprus
entity's beneficial owner or anything about its business. Nonetheless, pursuant to the terms of its
arrangement with the distributor, Lilly-Vostok paid the entity in Cyprus over $3.8 million in
early 2003.
36. The Cyprus entity was, in fact, owned by the Russian businessman who was the
owner of the distributor. There is no evidence of services provided to Lilly-Vostok by the
Cyprus entity in consideration for Lilly-Vostok's $3.8 million in payments. Lilly's books and
records improperly reflected these payments as payments for services.
37. In at least two instances, the arrangements involved foreign government officials.
Between 2000 and 2005, Lilly-Vostok sold significant amounts of pharmaceutical products to a
major Russian pharmaceutical distributor for resale to the Russian Ministry of Health. The
pharmaceutical distributor was owned and controlled by an individual who, at the beginning of
the distributor's relationship with Lilly-Vostok, was a close adviser to a member of Russia's
Parliament. In 2003, this official became a member of the upper house of Russia's Parliament.
Throughout the period, this official exercised considerable influence over government decisions
relating to the pharmaceutical industry in Russia.
38. As part of most of the sales arrangements with the distributor, the official
demanded that Lilly-Vostok enter into separate "marketing" agreements with entities with
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addresses and bank accounts in Cyprus. Under the arrangement, Lilly-Vostok paid the Cypriot
entities up to thirty percent of the sales price of the underlying sales contracts in return for the
Cypriot entities entering into an agreement "to offer all assistance necessary" in various areas
like storage, importation and payment.
39. In conjunction with outside counsel, Lilly-Vostok conducted limited due diligence
on these third-parties. However, the due diligence did not identify the beneficial owners of these
third-parties or determine whether the third-parties were able to provide the contracted-for
assistance. Nonetheless, Lilly-Vostok concluded that it could proceed with the transactions and
paid the Cypriot entities over $5.2 million. In fact, the Cypriot entities were owned by an
individual associated with the distributor controlled by the member of the upper house of Russia
Parliament. The Cypriot entity transferred the payments from Lilly-Vostok to other off-shore
entities.
40. In connection with another series of contracts, from 2000 through 2004, Lilly-
Vostok sold products to a distributor, headquartered in Moscow, which was wholly-owned by a
Russian government entity. The purchase agreements were signed on the government-owned
distributor's behalf by its General Director. As part of the arrangement, the government-owned
distributor selected a third-party entity with an address in the British Virgin Islands ("the BVI
entity") with which Lilly-Vostok entered into agreements for the broadly defined
"services" enumerated in the Lilly-Vostok template (see above). Under the terms of the
agreements between Lilly-Vostok and the BVI entity, Lilly-Vostok was to pay the BVI entity up
to 15% of the price of the product purchased by the government-owned distributor. Accordingly,
from 2000 through 2005, Lilly-Vostok made approximately 65 payments to the BVI entity
totaling approximately $2 million.
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41. There is no evidence that the BVI entity performed any of the services listed in its
agreement with Lilly-Vostok. There is also no evidence that Lilly-Vostok performed any due
diligence or inquiry as to whether the BVI entity was able or did perform the contracted-for
services. Lastly, there is no evidence that Lilly-Vostok performed any due diligence or inquiry
into the identity of the beneficial owner of the BVI entity. In fact, the beneficial owner of the
BVI entity was the General Director of the government-owned distributor, and he ulimately
received the payments from the BVI entity.
42. Lilly did not direct Lilly-Vostok to cease entering into these third-party
agreements until 2004. However, Lilly permitted the subsidiary to continue making payments
under already existing third-party contracts as late as 2005.
43. From 2005 through 2008, Lilly-Vostok made various proposals to government
officials in Russia regarding how Lilly-Vostok could donate to or otherwise support various
initiatives that were affiliated with public or private institutions headed by the government
officials or otherwise important to the government officials. Examples included their personal
participation or the participation of people from their institutions in clinical trials and
international and regional conferences and the support of charities and educational events
associated with the institutes. At times, these proposals to government officials were made in a
communication that also included a request for assistance in getting a product reimbursed or
purchased by the government. Generally, Lilly-Vostok personnel believed these proposals were
proper because of their relevance to public health issues and many of the proposals were
reviewed by counsel. Nonetheless, Lilly-Vostok did not have in place internal controls through
which such proposals were vetted to ascertain whether Lilly-Vostok was offering something of
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value to a government official for a purpose of influencing or inducing him or her to assist Lilly-
Vostok in obtaining or retaining business.
Lilly's Books and Records
44. As detailed above, subsidiaries of Eli Lilly made numerous payments that were
incorrectly described in the company's books and records. In China, payments were falsely
described as reimbursement of expenses when, in fact, the money was used to provide gifts to
government-employed physicians. In Brazil, money that was described in company records as a
"discount" for a pharmaceutical distributor was, in actuality, a bribe for government officials. In
Poland, payments classified as charitable donations were not intended for a genuine charitable
purpose but rather to induce a government official to assent to the purchase of a Lilly product.
Finally, in Russia, millions of dollars in payments, described in the company's books and records
as for various services, were actually payments to assure that Lilly was able to conduct business
with certain pharmaceutical distributors.
Lilly's Internal Controls
45. During the relevant period, Lilly and its subsidiaries failed to devise and maintain
an adequate system of internal accounting sufficient to provide reasonable assurance that the
company maintained accountability for its assets and transactions were executed in accordance
with management's authorization. Particularly, Lilly did not adequately verify that
intermediaries with which the company was doing government-related business would not
provide a benefit to a government official on Lilly's behalf in order to obtain or retain business.
Lilly and its subsidiaries primarily relied on assurances and information provided in the
paperwork by these intermediaries or by Lilly personnel rather than engaging in adequate
verification and analyzing the surrounding circumstances of the transaction. Lilly and its
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PFIZERFCPACOMPLIANCE
PROGRAMIMPROVEMENTS
t
In order t o a ddres s a ny def i c i enc i es i n i t s i nt erna l c ont rol s , p ol i c i es , a nd p roc edures
rega rdi ng c omp l i a nc e wi t h t he Forei gn Corrup t P ra c t i c es Ac t ("FCP A") , 15 U.S.C. 78dd- 1, et
s eq ., a nd ot her a p p l i c a b l e a nt i-c orrup t i on l a ws , P f i z er Inc . a nd i t s s ub s i di a ri es a nd op era t i ng
c omp a ni es (c ol l ec t i v el y, "P f i z er") a gree t o c ont i nue t o c onduc t a p p rop ri a t e rev i ews of i t s
ex i s t i ng i nt erna l c ont rol s , p ol i c i es , a nd p roc edures .
Where nec es s a ry a nd a p p rop ri a t e, P f i z er a grees t o a dop t new or t o modi f y ex i s t i ng
i nt erna l c ont rol s , p ol i c i es , a nd p roc edures i n order t o ens ure t ha t i t ma i nt a i ns : (a ) a s ys t em of
i nt erna l a c c ot ul t i ng c ont rol s des i gned t o ens ure t ha t P f i z er ma kes a nd keep s f a i r a nd a c c ura t e
b ooks , rec ords , a nd a c c ount s ; a nd (b ) ri gorous a nt i- c orrup t i on c omp l i a nc e c ode, s t a nda rds , a nd
p roc edures -des i gned t o det ec t a nd det er v i ol a t i ons of t he FCP A a nd ot her a p p l i c a b l e a nt i -
c orrup t i on l a ws . At a mi ni mum, t hi s s houl d i nc l ude, b ut not b e L i mi t ed t o, t he f ol l owi ng
el ement s :
A c l ea rl y a rt i c ul a t ed c orp ora t e p ol i c y a ga i ns t v i ol a t i ons of t he FCP A,
i nc l udi ng i t s a nt i-b ri b ery, b ooks a nd rec ords , a nd i nt erna l c ont rol s p rov i s i ons , a nd ot her
a p p l i c a b l e c ount erp a rt s (c ol l ec t i v el y, t he "a nt i - c orrup t i on l a ws") ;
2. P romul ga t i on of c omp l i a nc e s t a nda rds a nd p roc edures des i gned t o reduc e
t he p ros p ec t of v i ol a t i ons of t he a nt i- c orrup t i on l a ws a nd P f i z er' s c omp l i a nc e c ode. Thes e
s t a nda rds a nd p roc edures s ha l l a p p l y t o a l l di rec t ors , of f i c ers , a nd emp l oyees a nd, where
nec es s a ry a nd a p p rop ri a t e, out s i de p a rt i es whi l e a c t i ng on b eha l f of P f i z er i n a f orei gn
j uri s di c t i on, i nc l udi ng b ut not l i mi t ed t o, a gent s , c ons ul t a nt s , rep res ent a t i v es , di s t ri b ut ors ,
t ea mi ng p a rt ners , a nd j oi nt v ent ure p a rt ners (c ol l ec t i v el y, "a gent s a nd b us i nes s p a rt ners") ;
: ~~
The a s s i g n i i ~ en t of r es p on s i b i l i t y t o on e or mor e s en i or c or p or a t e
ex ec u t i v es of P fi z er for t he i mp l emen t a t i on a n d ov er s i g ht of c omp l i a n c e wi t h p ol i c i es , s t a n da r ds ,
a n d p r oc edu r es r eg a r di n g t he a n t i - c or r u p t i on l a ws . Su c h c or p or a t e offi c i a l s ) s ha l l ha v e t he
a u t hor i t y t o r ep or t ma t t er s di r ec t l y t o P fi z er ' s Boa r d of D i r ec t or s or a n y a p p r op r i a t e c ommi t t ee
of t he Boa r d of D i r ec t or s ;
4. Mec ha n i s ms des i g n ed t o en s u r e t ha t t he p ol i c i es , s t a n da r ds , a n d
p r oc edu r es of P fi z er r eg a r di n g t he a n t i- c or r u p t i on l a ws a r e effec t i v el y c ommu n i c a t ed t o a l l
di r ec t or s , offi c er s , emp l oy ees , a n d, wher e a p p r op r i a t e, a g en t s a n d b u s i n es s p a r t n er s . Thes e
mec ha n i s ms s ha l l i n c l u de: (a ) p er i odi c t r a i n i n g for a l l di r ec t or s , offi c er s , a n d emp l oy ees , a n d,
wher e n ec es s a r y a n d a p p r op r i a t e, a g en t s a n d b u s i n es s p a r t n er s ; a n d (b ) a c c omp a n y i n g
c er t i fi c a t i on s b y a l l s u c h di r ec t or s , offi c er s , a n d emp l oy ees , a n d, wher e n ec es s a r y a n d
a p p r op r i a t e, a g en t s , a n d b u s i n es s p a r t n er s , c er t i fy i n g c omp l i a n c e wi t h t he t r a i n i n g r eq u i r emen t s ;
An effec t i v e s y s t em for r ep or t i n g s u s p ec t ed c r i mu i a l c on du c t a n d/ or
v i ol a t i on s of t he c omp l i a n c e p ol i c i es , s t a n da r ds , a n d p r oc edu r es r eg a r di n g t he a n t i -c on - u p t i on
l a ws for di r ec t or s , offi c er s , emp l oy ees , a n d, wher e n ec es s a r y a n d a p p r op r i a t e, a g en t s a n d
b u s i n es s p a r t n er s ;
6. Ap p r op r i a t e di s c i p l i n a r y p r oc edu r es t o a ddr es s , . a mon g ot her t hi n g s ,
v i ol a t i on s of t he a n t i- c or r u p t i on l a ws a n d P fi z er ' s c omp l i a n c e c ode b y P fi z er ' s di r ec t or s ,
offi c er s , a n d emp l oy ees ;
7 . Ap p r op r i a t e du e di l i g en c e r eq u i r emen t s p er t a i n i n g t o t he r et en t i on a n d
ov er s i g ht of a g en t s a n d b u s i n es s p a r t n er s ;
St a n da r d p r ov i s i on s i n a g r eemen t s , c on t r a c t s , a n d r en ewa l s t her eof wi t h
a l l a g en t s a n d b u s i n es s p a r t n er s t ha t a r e r ea s on a b l y c a l c u l a t ed t o p r ev en t v i ol a t i on s of t he a n t i -
c omt p t i on l a ws , whi c h ma y , dep en di n g u p on t he c i r c u ms t a n c es , i n c l u de: (a ) a n t i - c or r u p t i on
C . 1 - 2
r e p r e s e n t a t i o n s a n d u n de r t a k i n g s r e l a t i n g t o co mp l i a n ce wi t h t he a n t i-co r r u p t i o n l a ws ; (U) r i g ht s
t o co n du ct a u di t s o f t he bo o k s a n d r e co r ds o f t he a g e n t o r bu s i n e s s p a r t n e r t o e n s i u e co mp l i a l i ce
wi t h t he fo r e g o i n g ; a n d (c) r i g ht s t o t e r mi n a t e a n a g e n t o r bu s i n e s s p a r t n e r a s a r e s u l t o f a l l y
br e a ch o f a n t i - co n ~ u p t i o n l a ws , a n d r e g u l a t i o n s o r r e p r e s e n t a t i o n s a n d u n de r t a k i n g s r e l a t e d t o
s u ch ma t t e r s ; a n d
9 . P e r i o di c t e s t i n g o f t he co mp l i a n ce co de , s t a n da r ds , a n d p r o ce du r e s
de s i g n e d t o e v a l u a t e t he i r e ffe ct i v e n e s s i n de t e ct i n g a n d r e du ci n g v i o l a t i o n s o f a n t i -co r r u p t i o n
l a ws a n d P fi z e r ' s co mp l i a n ce co de .
C. 1 - 3
A T T ' r ~ C I -~ l ~ ~ I ~ 1 ~ ' C .2
I n a d d i t i o n t o a nd b u i l d i ng u po n t h e co mmi t me nt s e nu me r a t e d i n A t t a ch me nt C .1 , P f i z e r
I nc. a nd i t s su b si d i a r i e s a ci d o pe r a t i ng co mpa ni e s ( co l l e ct i v e l y , " P f i z e r" ) a g r e e t h a t t h e y h a v e
t a k e n o r w i l l u nd e r t a k e t h e f o l l o w i ng , a t a mi ni mu m, f o r t h e d u r a t i o n o f t h e D e f e r r e d P r o se cu t i o n
A g r e e me nt b e t w e e n t h e U ni t e d S t a t e s D e pa r t me nt o f J u st i ce , C r i mi na l D i v i si o n, F r a u d S e ct i o n
( t h e " D e pa r t me nt" ) a nd P f i z e r H .C .P . C o r po r a t i o n d a t e d ~ '
Ge ne r a l
P f i z e r w i l l :
a . Ma i nt a i n t h e a ppo i nt me nt o f a se ni o r co r po r a t e e x e cu t i v e w i t h si g ni f i ca nt
e x pe r i e nce w i t h co mpl i a nce w i t h t h e F C P A , i ncl u d i ng i t s a nt i-b r i b e r y , b o o k s a nd
r e co r d s, a nd i nt e r na l co nt r o l s pr o v i si o ns, a s w e l l a s o t h e r a ppl i ca b l e a nt i -
co r r u pt i o n l a w s a nd r e g u l a t i o ns ( h e r e i na f t e r " a nt i -co r r u pt i o n l a w s a nd
r e g u l a t i o ns" ) t o se r v e a s C h i e f C o mpl i a nce a nd Ri sk O f f i ce r . T h e C h i e f
C o mpl i a nce a nd Ri sk O f f i ce r w i l l h a v e r e po r t i ng o b l i g a t i o ns d i r e ct l y t o t h e C h i e f
E x e cu t i v e O f f i ce r a nd pe r i o d i c r e po r t i ng o b l i g a t i o ns t o t h e A u d i t C o mmi t t e e o f
t h e Bo a r d o f D i r e ct o r s.
b . Ma i nt a i n t h e a ppo i nt me nt o f h e a d s o f co mpl i a nce w i t h r e spo nsi b i l i t y f o r e a ch o f
i t s b u si ne ss u ni t s (" BU C o mpl i a nce Le a d s" ) w h o h a v e r e po r t i ng o b l i g a t i o ns
t h r o u g h t h e C h i e f C o mpl i a nce a nd Ri sk O f f i ce r o r Ge ne r a l C o u nse l .
c. E st a b l i sh a nd ma i nt a i n a n " E x e cu t i v e C o mpl i a nce C o mmi t t e e " t o o v e r se e P f i z e r ' s
co r po r a t e co mpl i a nce pr o g r a m w i t h r e spe ct t o b o t h t h e l a w s a nd r e g u l a t i o ns
a ppl i ca b l e t o P f i z e r ' s b u si ne ss a nd t o P f i z e r ' s C o d e o f C o nd u ct a nd r e l a t e d
C 2- 1
p o l i c i e s . The E x e c u t i v e Co mp l i anc e Co mmi t t e e i s c hai r e d by t he Chi e f E x e c u t i v e
O ffi c e r , and i nc l u d e s ap p r o p r i at e s e ni o r l e ad e r s , s u c h as t he Chi e f F i nanc i al
O ffi c e r , t he Ge ne r al Co u ns e l and s e ni o r l e ad e r s fr o m c o mp l i anc e , fi nanc e , au d i t ,
hu man r e s o u r c e s and P fi z e r ' s bu s i ne s s u ni t s .
2 . P fi z e r has and w i l l mai nt ai n g i ft s , ho s p i t al i t y, and t r av e l p o l i c i e s and p r o c e d u r e s i n e ac h
j u r i s d i c t i o n t hat ar e ap p r o p r i at e l y d e s i g ne d t o p r e v e nt v i o l at i o ns o f t he ant i-c o r r u p t i o n
l aw s and r e g u l at i o ns . , S p e c i fi c al l y, P fi z e r has i mp l e me nt e d and w i l l mai nt ai n t he
fo l l o w i ng e nhanc e d ant i -c o n- u p t i o n p o l i c i e s and p r o c e d u r e s :
a. A Gl o bal Ant i -B r i be r y and Ant i -Co r r u p t i o n Co r p o r at e P o l i c y and an I nt e r nat i o nal
Ant i -B r i be r y and Ant i -Co r r u p t i o n P r o c e d u r e ( t he "F CP A P r o c e d u r e") , w hi c h ar e
s u p p o r t e d by i mp l e me nt i ng s t and ar d o p e r at i ng p r o c e d u r e s by mar k e t , r e g i o n o r
fu nc t i o n as ap p r o p r i at e ; and w hi c h p r o v i d e d e t ai l e d p r o c e d u r e s fo r e mp l o ye e s t o
fo l l o w w he n i nt e r ac t i ng w i t h fo r e i g n g o v e r nme nt o ffi c i al s and c o nd u c t i ng F CP A
d u e d i l i g e nc e o n c o ns u l t ant s , t e c hni c al ad v i s o r s , r e s e ar c he r s and g r ant r e c i p i e nt s
and , w he r e ap p r o p r i at e , i n c o mme r c i al t r ans ac t i o ns w i t h "ag e nt s and bu s i ne s s
p ar t ne r s " ( as d e fi ne d i n At t ac hme nt C. 1 ) . The F CP A P r o c e d u r e e s t abl i s he s
p r o c e d u r e s and s p e c i fi c l i mi s g o v e r ni ng t he p r o v i s i o n by P fi z e r ' s e mp l o ye e s o f
g i ft s , ho s p i t al i t y, i nt e r nat i o nal t r av e l and s i t e v i s i t s , me e t i ng s u p p o r t , e d u c at i o nal
g r ant s , c har i t abl e d o nat i o ns , and c o ns u l t i ng fe e s , s p e ak e r fe e s , ho no r ar i a, and t he
l i k e t o fo r e i g n g o v e r nme nt o ffi c i al s . Al l o f t he s e p r o c e d u r e s ar e i n t he l o c al
l ang u ag e w he n ap p r o p r i at e .
b. A Gl o bal P o l i c y o n I nt e r ac t i o ns w i t h H e al t hc ar e P r o fe s s i o nal s w hi c h i s s u p p o r t e d
by i mp l e me nt i ng s t and ar d o p e r at i ng p r o c e d u r e s by mar k e t , r e g i o n o r fu nc t i o n, as
ap p r o p r i at e , e s t abl i s hi ng e t hi c al s t and ar d s and p r o c e d u r e s fo r P fi z e r e mp l o ye e s t o
C. 2 - 2
follow when i nt er a c t i ng wi t h p hy s i c i a ns , nu r s es , a nd ot her s u c h hu ma n hea lt hc a r e
p r ofes s i ona ls , i nc lu di ng s t a nda r ds r ela t ed t o p r odu c t s a mp les , s u p p or t for
c onfer enc es , a nd p r a c t i c e-r ela t ed i t ems .
c . At a mi ni mu m, t hes e p oli c i es a nd p r oc edu r es s ha ll c ont a i n t he followi ng
r es t r i c t i ons r eg a r di ng for ei g n g over nment offi c i a ls , i nc lu di ng bu t not li mi t ed t o
p u bli c hea lt h c a r e p r ovi der s , a dmi ni s t r a t or s , a nd r eg u la t or s :
G i ft s mu s t be modes t i n va lu e, a p p r op r i a t e u nder t he c i r c u ms t a nc es , a nd
g i ven i n a c c or da nc e wi t h a nt i -c omt p t i on la ws a nd r eg u la t i ons , i nc lu di ng
t hos e of t he g over nment offi c i a l' s home c ou nt r y ;
i i . H os p i t a li t y s ha ll be li mi t ed t o r ea s ona bly p r i c ed mea ls , a c c ommoda t i ons ,
a nd i nc i dent a l exp ens es t ha t a r e p a r t of p r odu c t edu c a t i on a nd g a i ni ng
p r og r a ms , p r ofes s i ona l t r a i ni ng , a nd c onfer enc es or bu s i nes s meet i ng s ;
i i i . Tr a vel s ha ll be li mi t ed t o p r odu c t edu c a t i on a nd t r a i ni ng p r og r a ms ,
p r ofes s i ona l t r a i ni ng a nd edu c a t i on, a nd c onfer enc es or bu s i nes s meet i ng s ;
a nd
i v. G i ft s , hos p i t a li t y , a nd t r a vel s ha ll not i nc lu de exp ens es for a ny one ot her
t ha n t he r eleva nt offi c i a ls , u nles s di ffer ent s t a nda r ds a r e r eq u i r ed by loc a l
la w or r eg u la t i on.
C ' omp la i nt ~ , I 2 ep oa ~ t s , a nd C ' o~ a p li a nc e I s s u es
P fi z er ha s c ommi t t ed a nd wi ll c ont i nu e t he c ommi t ment of s i g ni fi c a nt ly enha nc ed
r es ou r c es for t he i nt er na t i ona l fu nc t i ons of t he C omp li a nc e Di vi s i on t ha t ha ve r ep or t i ng
obli g a t i ons t hr ou g h t he C hi ef C omp li a nc e a nd Ri s k O ffi c er or G ener a l C ou ns el,
i nc lu di ng t he followi ng :
C . 2 - 3
a . An i nt e r na t i o na l i nv e s t i g a t i o ns g r o up cha r g e d wi t h r e s po ndi ng t o a nd
i nv e s t i g a t i ng a nt i -co r r upt i o n co mpl i a nce i s s ue s r e po r t e d o n a g l o b a l b a s i s a ci d
e ns ur i ng t ha t a ppr o pr i a t e r e me di a l me a s ur e s a r e unde r t a ke n a f t e r t he co mpl e t i o n
o f a n i nv e s t i g a t i o n;
b . An a nt i-co r r upt i o n pr o g r a m o f f i ce pr o v i di ng ce nt r a l i z e d a s s i s t a nce a nd g ui da nce
r e g a r di ng t he i mpl e me nt a t i o n, upda t i ng a nd r e v i s i ng o f t he FCPA Pr o ce dur e , t he
e s t a b l i s hme nt o f s ys t e ms t o e nha nce co mpl i a nce wi t h t he FCPA Pr o ce dur e , a nd
t he a dmi ni s t r a t i o n o f co r po r a t e- l e v e l t r a i ni ng a nd a nnua l a nt i-co r r upt i o n
ce r t i f i ca t i o ns ; a nd
c. A me r g e r s a nd a cq ui s i t i o ns co mpl i a nce f unct i o n de s i g ne d t o s uppo r t e a r l y
i de nt i f i ca t i o n o f co mpl i a nce r i s ks a s s o ci a t e d wi t h co mpl e x b us i ne s s t r a ns a ct i o ns
a nd t o e ns ur e t he i nt e g r a t i o n o f Pf i z e r ' s co mpl i a nce pr o ce dur e s i nt o ne wl y
a cq ui r e d e nt i t i e s .
4. Pf i z e r s ha l l ma i nt a i n i t s me cha ni s ms f o r ma ki ng a nd ha ndl i ng r e po r t s a nd co mpl a i nt s
r e l a t e d t o po t e nt i a l v i o l a t i o ns o f a nt i-co r r upt i o n l a ws a nd r e g ul a t i o ns , i ncl udi ng , whe n
a ppr o pr i a t e , r e f e r r a l f o r r e v i e w a nd r e s po ns e b y i nt e r na l a udi t , f i na nce , l e g a l , co mpl i a nce
a nd o t he r pe r s o nne l a s a ppr o pr i a t e , a nd wi l l e ns ur e t ha t r e a s o na b l e a cce s s i s pr o v i de d t o
a n a no nymo us , t o l l- f r e e ho t l i ne a s we l l a s t o a n a no nymo us e l e ct r o ni c co mpl a i nt f o r m,
whe r e a no nymo us r e po r t i ng i s l e g a l l y pe r mi s s i b l e .
5. Pf i z e r , t hr o ug h i t s Exe cut i v e Co mpl i a nce Co mmi t t e e , ~ ~ i l l e ns ur e t ha t t he Co mpl i a nce
a nd Le g a l D i v i s i o ns r e v i e w a nd r e s po nd t o FCPA a nd co r r upt i o n i s s ue s pr o mpt l y a nd
co ns i s t e nt l y.
C. 2 - 4
disk 1 4 sse ss~ a ~ e r z t ~ a nd ~ r o a c t iv e Re v ie ws
6. P f iz e r ha s c o nduc t e d a nd wil l c o nt inue t o c o nduc t a r isk-ba se d pr o gr a m o f a ml ua l
pr o a c t iv e a nt i-c o r r upt io n r e v ie ws o f high-r isk ma r ke t s. The se FCP A pr o a c t iv e r e v ie ws
a r e de signe d t o ide nt if y a nt i-c o r r upt io n c o n7 pl ia nc e issue s, e xa mine c o mpl ia nc e
pr o c e dur e s a nd c o nt r o l s a s impl e me nt e d in t he f ie l d a nd ide nt if y be st pr a c t ic e s t o be
impl e me nt e d in a ddit io na l ma r ke t s. On t he ba sis o f t ho se a sse ssme nt s, a s ne e de d, P f iz e r
wil l mo dif y c o mpl ia nc e impl e me nt a t io n t o minimiz e r isks o bse r v e d t hr o ugh t he FCP A
pr o a c t iv e r e v ie w pr o c e ss.
7 . S pe c if ic a l l y , P f iz e r wil l ide nt if y ma r ke t s whic h a r e a t high r isk f o r c o n-upt io n be c a use o f
t he ir busine ss a nd l o c a t io n, a nd wil l se l e c t a t l e a st f iv e o f t ho se ma r ke t s t o r e c e iv e FCP A
pr o a c t iv e r e v ie ws dur ing t ha t y e a r . High r isk ma r ke t s sha l l be ide nt if ie d ba se d o n
P f iz e r ' s r isk a sse ssme nt pr o c e ss in c o nsul t a t io n wit h t he Chie f Co mpl ia nc e a nd Risk
Of f ic e r , t a king int o a c c o unt mul t ipl e r isk f a c t o r s inc l uding, but no t l imit e d t o : a high
de gr e e o f int e r a c t io n wit h f o r e ign go v e r nme nt o f f ic ia l s; t he e xist e nc e o f int e r na l r e po r t s
o f po t e nt ia l c o r r upt io n r isk; a high c o r r upt io n r isk ba se d o n c e r t a in c o r r upt io n inde xe s;
a nd f ina nc ia l a udit r e sul t s. Ea c h FCP A pr o a c t iv e r e v ie w sha l l inc l ude , a t a minimum:
a . On-sit e v isit s by a n FCP A r e v ie w t e a m c o mpr ise d o f q ua l if ie d pe r so nne l f r o m t he
Co mpl ia nc e a nd, whe n a ppr o pr ia t e , Le ga l Div isio ns who ha v e r e c e iv e d FCP A
a nd a nt i-c o r r upt io n t r a ining;
b. Whe r e a ppr o pr ia t e , pa r t ic ipa t io n in t he o n-sit e v isit s by q ua l if ie d a udit o r s;
c . Re v ie w o f a r e pr e se nt a t iv e sa mpl e , a ppr o pr ia t e l y a dj ust e d f o r t he r isks o f t he
ma r ke t , o f c o nt r a c t s wit h a nd pa y me nt s t o indiv idua l f o r e ign go v e r nme nt o f f ic ia l s
o r he a l t h c a r e pr o v ide r s, a s we l l a s o t he r high-r isk t r a nsa c t io ns in t he ma r ke t ;
C.2 -5
d . C r e a t i o n o f a c t i o n p l a n s r e s u l t i n g fr o m i s s u e s i d e n t i fi e d d u r i n g FC PA p r o a c t i v e
r e v i e ws ; t h e s e a c t i o n p l a n s wi l l be s h a r e d wi t h a p p r o p r i a t e s e n i o r ma n a g e me n t ,
i n c l u d i n g wh e n a p p r o p r i a t e t h e C h i e f C o mp l i a n c e a n d Ri s k O ffi c e r , a n d wi l l
c o n t a i n ma n d a t o r y r e me d i a l s t e p s d e s i g n e d t o e n h a n c e a n t i-c o r r u p t i o n
c o mp l i a n c e , r e p a i r p r o c e s s we a kn e s s e s , a n d d e t e r v i o l a t i o n s ; a n d
e . Wh e r e a p p r o p r i a t e , fe a s i bl e , a n d p e r mi s s i bl e u n d e r l o c a l l a w, r e v i e w o f t h e bo o ks
a n d r e c o r d s o f a s a mp l e o f d i s t r i bu t o r s wh i c h , i n t h e v i e w o f t h e FC PA p r o a c t i v e
r e v i e w t e a m, ma y p r e s e n t c o r r u p t i o n r i s k.
8. Pfi z e r h a s i mp l e me n t e d a n d wi l l c o n t i n u e t o i mp l e me n t a n FC PA t r e n d a n a l ys i s t h a t
r e q u i r e s v a r i o u s o p e r a t i o n a l fu n c t i o n s t o t r a c k a n d r e v i e w c e r t a i n c a t e g o r i e s o f
i n t e r a c t i o n s wi t h fo r e i g n g o v e r n me n t o ffi c i a l s a n d d u e d i l i g e n c e o n a g e n t s a n d bu s i n e s s
p a r t n e r s .
~ 4 c q u i s i t i o n s
Pfi z e r h a s e n s u r e d a n d wi l l c o n t i n u e t o e n s u r e t h a t , wh e n p r a c t i c a bl e a n d a p p r o p r i a t e o n
t h e ba s i s o f a FC PA r i s k a s s e s s me n t , n e w bu s i n e s s e n t i t i e s a r e o n l y a c q u i r e d a ft e r
t h o r o u g h r i s k- ba s e d FC PA a n d a n t i-c o r r u p t i o n d u e d i l i g e n c e wa s c o n d u c t e d by a s u i t a bl e
c o mbi n a t i o n o f l e g a l , a c c o u n t i n g , a n d c o mp l i a n c e p e r s o n n e l . Wh e n s u c h a n t i-c o r r u p t i o n
d u e d i l i g e n c e i s a p p r o p r i a t e bu t n o t p r a c t i c a bl e p r i o r t o a c q u i s i t i o n o f a n e w bu s i n e s s fo r
r e a s o n s be yo n d Pfi z e r ' s c o n t r o l , o r d u e t o a n y a p p l i c a bl e l a w, r u l e , o r r e g u l a t i o n , Pfi z e r
h a s c o n d u c t e d a n d wi l l c o n d u c t a n t i-c o r r u p t i o n d u e d i l i g e n c e s u bs e q u e n t t o t h e
a c q u i s i t i o n a n d r e p o r t t o t h e De p a r t me n t a n y c o r r u p t p a yme n t s o r fa l s i fi e d bo o ks a n d
r e c o r d s a s r e q u i r e d by At t a c h me n t C . 3 .
C . 2 - 6
I0. P f i z e r w i l l e nsur e t h a t P f i z e r ' s p o l i c i e s, st a nd a r d s a nd p r o c e d ur e s r e g a r d i ng a nt i -
c o n~ up t i o n l a w s a nd r e g ul a t i o ns a p p l y a s q ui c k l y a s i s p r a c t i c a b l e , b ut i n a ny e ve nt no
mo r e t h a n o ne ye a r p o st- c l o si ng , t o ne w l y- a c q ui r e d b usi ne sse s, a nd w i l l p r o mp t l y:
a . Tr a i n d i r e c t o r s, o f f i c e r s, a nd se ni o r ma na g e r s, a nd t h o se e mp l o ye e s w o r k i ng i n
p o si t i o ns i nvo l vi ng a c t i vi t i e s c o ve r e d b y P f i z e r ' s p o l i c i e s r e g a r d i ng
a nt i- c o r r up t i o n a nd c o mp l i a nc e w i t h t h e FCP A, a nd , w h e r e ne c e ssa r y a nd
a p p r o p r i a t e , a g e nt s a nd b usi ne ss p a r t ne r s; a nd
b . Inc l ud e a l l ne w l y- a c q ui r e d b usi ne sse s i n P f i z e r ' s r e g ul a r a nt i- c o r r up t i o n a ud i t i ng
sc h e d ul e .
I~ e l a t i o r e sh z p s w i t h 7 ' Iz i r d P a ~ P i e s
11. Wh e n a p p r o p r i a t e o n t h e b a si s o f a FCP A r i sk a sse ssme nt , P f i z e r w i l l c o nd uc t r i sk- b a se d
d ue d i l i g e nc e o f sa l e s i nt e r me d i a r i e s, i nc l ud i ng a g e nt s, c o nsul t a nt s, r e p r e se nt a t i ve s,
d i s~ - i b ut o r s, a nd j o i nt ve nt ur e p a r t ne r s. Suc h d ue d i l i g e nc e w i l l b e c o nd uc t e d p r i o r t o t h e
r e t e nt i o n o f a ny ne w a g e nt , c o nsul t a nt , r e p r e se nt a t i ve , d i st r i b ut o r , o r j o i nt ve nt ur e p a r t ne r
a nd .f o r a l l suc h sa l e s i nt e r me d i a r i e s w i l l b e up d a t e d no l e ss t h a n o nc e e ve r y t h r e e ye a r s.
At a mi ni mum, suc h d ue d i l i g e nc e sh a l l i nc l ud e :
a . A r e vi e w o f t h e q ua l i f i c a t i o ns a nd b usi ne ss r e p ut a t i o n o f t h e sa l e s i nt e r me d i a r i e s;
b . A r a t i o na l e f o r t h e use o f t h e sa l e s i nt e r me d i a r y; a nd
A r e vi e w o f r e l e va nt FCP A r i sk a r e a s.
12. Wh e r e d ue d i l i g e nc e o f a sa l e s i nt e r me d i a r y r a i se s a se r i o us r e d f l a g , t h e r e l e va nt
i nf o r ma t i o n sh a l l b e r e vi e w e d b y p e r so nne l f r o m t h e c o mp l i a nc e o r l e g a l d i vi si o ns w h o
h a ve r e c e i ve d FCP A a nd a nt i- c o r r up t i o n t r a i ni ng .
13. Wh e r e ne c e ssa r y a nd a p p r o p r i a t e a nd w h e r e p e r mi t t e d b y a p p l i c a b l e l a w , P f i z e r h a s
i nc l ud e d a nd w i l l i nc l ud e st a nd a r d p r o vi si o ns d e si g ne d t o p r e ve nt vi a l a t i o ns o f t h e FCP A
C.2 - 7
and other ap p l i c ab l e anti-c orru p ti on l aws and reg u l ati ons i n ag reements, c ontac ts, and
renewal s thereof wi th. ag ents and b u si ness p artners, i nc l u di ng :
a. Anti-c orru p ti on rep resentati ons and u ndertaki ng s rel ati ng to c omp l i anc e wi th the
anti-c orru p ti on l aws and reg u l ati ons;
b . Ri g hts to c ondu c t au di ts of the b ooks and rec ords of the ag ent or b u si ness p artner
that are rel ated to thei r b u si ness wi th P fi z er; and
c . Ri g hts to termi nate the ag ent or b u si ness p artner as a resu l t of any b reac h of anti -
c orru p ti on l aws and reg u l ati ons or rep resentati ons and u ndertaki ng s rel ated to
su c h anti-c orru p ti on l aws and reg u l ati ons.
T ` Y ai ni n~
14. P fi z er has p rovi ded and shal l p rovi de:
a. Bi enni al trai ni ng on anti-c orru p ti on l aws and reg u l ati ons to di rec tors, offi c ers,
exec u ti ves, and emp l oyees worki ng i n p osi ti ons i nvol vi ng ac ti vi ti es c overed b y
P fi z er' s p ol i c i es reg ardi ng anti-c orru p ti on and c omp l i anc e wi th the FCP A;
b . Enhanc ed FCP A trai ni ng for al l i nternal au di t, fi nanc i al , c omp l i anc e and l eg al
p ersonnel i nvol ved i n FCP A p roac ti ve revi ews or anti -c orru p ti on du e di l i g enc e
rel ated to the p otenti al ac q u i si ti on of new b u si nesses, i f not al ready q u al i fi ed and
exp eri enc ed; and
c . When ap p rop ri ate on the b asi s of a FCP A ri sk assessment, p rovi de FCP A and
anti-c orru p ti on trai ni ng to rel evant ag ents and b u si ness p artners, at l east onc e
every three years.
15. P fi z er has i mp l emented and shal l mai ntai n a system of annu al c erti fi c ati ons from seni or
manag ers i n eac h of P fi z er' s Bu si ness Uni ts, Di vi si ons, and op erati onal fu nc ti ons (at the
market or reg i onal l evel , or the reasonab l e eq u i val ent) as ap p rop ri ate, c onfi rmi ng that
C. 2 - 8
t h e i r s t a n d a r d o p e r a t i n g p r o c e d u r e s a d e q u a t e l y i i n p l e n l e n t P f i z e r ' s a n t i - c o r r u p t i o n
p o l i c i e s , p r o c e d u r e s a n d c o n t r o l s , i n c l u d i n g t r a i n i n g r e q u i r e m e n t s , t h a t t h e y h a ve
r e vi e we d a n d f o l l o we d u p o n a n y i s s u e s i d e n t i f i e d i n FCP A t r e n d a n a l y s e s , a n d t h a t t h e y
a r e n o t a wa r e o f a n y FCFA o r o t h e r c o n - u p t i o n i s s u e s t h a t h a ve n o t a l r e a d y be e n r e p o r t e d
t o t h e Co m p l i a n c e D i vi s i o n o r t h e Le g a l D i vi s i o n .
C. 2 - 9