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Sanofi to pay $25M to settle SEC corruption charges

Sanofi agreed to pay more than $25 million to settle the U.S. Securities and Exchange Commission's charges that certain of its units engaged in a kickback scheme in order to get business.

The settlement relates to an investigation by the SEC and U.S. Justice Department of certain local activities outside the U.S. and France — Kazakhstan, Jordan, Lebanon, Bahrain, Kuwait, Qatar, Yemen, Oman, the United Arab Emirates and the Palestinian territory — from 2006 to 2015.

According to the SEC, the French drugmakers' Kazakhstan and Middle East subsidiaries were involved in bribing government officials and healthcare providers in multiple countries to be awarded tenders and to increase prescriptions of its products.

In Kazakhstan, the SEC found that the company used distributors in a kickback scheme to generate funds for bribing government officials in order to secure tenders at public institutions. The regulator said the kickbacks were tracked in internal spreadsheets, where they were coded as "marzipans."

Additionally, the SEC said it found that the pharmaceutical giant was implementing several pay-to-prescribe schemes in the Middle East to induce healthcare providers to increase their prescriptions of Sanofi products.

The SEC's order found that Sanofi was in violation of the books and records and internal accounting controls provisions of the federal securities laws.

Sanofi agreed to a cease-and-desist order without admitting or denying the charges and has also agreed to a two-year period of self-reporting on the effectiveness of its enhanced internal controls and anti-bribery and corruption compliance program.

The company also agreed to pay $17.5 million in disgorgement, $2.7 million in prejudgment interest and a civil penalty of $5 million.

"We will continue to strengthen internal controls, anti-bribery and corruption compliance programs, and our oversight and training of teams worldwide. Conducting our activities in an ethical way is something that our company takes very seriously," Sanofi CEO Olivier Brandicourt said in a Sept. 4 statement.