Listen up, pharma companies: The Securities and Exchange Commission sees a few places where you might get yourselves into sticky situations. But there's an easy way to avoid trouble, and that's to beef up compliance and disclosure.
That's the message the SEC's top enforcement director, Andrew Ceresney, delivered on Tuesday, Reuters reports. For one, the commission has seen problems with pharma companies' disclosures—especially where they relate to the FDA.
"Accuracy of reporting in your dealings with the FDA is critical to getting investors the information they need. FDA dealings and approvals are the lifeblood of your business and are so important to investment decisions," he said at the Annual Pharmaceutical Compliance Congress.
And if drugmakers ignore that advice? "Not being straight with investors will have significant consequences," he said.
Pharma companies also run higher-than-average risks of violating the Foreign Corrupt Practices Act due to the nature of their business abroad, Ceresney pointed out. Bribery is the most common misstep, and schemes the SEC often sees range from payments for prescriptions to bribes cloaked as charitable contributions.
But a "robust" compliance program—as well as self-disclosure–can limit the damage if companies do breach the code, he said, as quoted by The Wall Street Journal. That includes personnel, policies and procedures, training, expense controls, internal audits, due diligence on third-party agents—and the list goes on.
Pharma companies have been learning that the hard way lately. In 2013, GlaxoSmithKline ($GSK) came under fire in China for funneling $489 million in doctor bribes through travel agents. Since then, the country has visited and/or probed a host of other multinational countries, and Glaxo's activities have come under the spotlight in the Middle East and Poland, too.
And it's not alone. Just last month, Teva ($TEVA) admitted it had "likely" violated the FCPA and local laws in Russia, Latin America and elsewhere, but it's been active in reporting the issues to the SEC and Department of Justice, it said.