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Novartis and Alcon to Pay $345M in Settlements Over Bribery Accusations

The agreements relate to violations in Greece, Vietnam and South Korea.




Novartis and former subsidiary Alcon Pte Ltd will pay nearly $347 million to settle bribery accusations levied by U.S. authorities. They will pay $233.9 million to the Department of Justice and $112.8 million to the Securities and Exchange Commission.

To resolve the DOJ investigation, Novartis Hellas S.A.C.I. entered into a deferred prosecution agreement “pertaining to inappropriate economic benefits provided to Greek healthcare professionals from 2012 to 2015 in connection with the ophthalmology product Lucentis,” according to a Novartis press release. The Novartis Hellas deferred prosecution agreement also covers books and records issues pertaining to the Lucentis conduct and to conduct related to a 2009 epidemiological study.

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The resolutions “contain no allegations relating to any bribery of Greek politicians, which is consistent with what Novartis found in its own internal investigation,” according to the release. All outstanding Foreign Corrupt Practices Act investigations into Novartis are now closed, the company noted.

Alcon Pte Ltd entered into a separate deferred prosecution agreement with the DOJ “pertaining to inappropriate economic benefits provided to Vietnamese healthcare professionals and books and records violations from 2011 to 2014 in Vietnam,” according to the release. The conduct related to a consultancy program run by a distributor in Vietnam.

The DOJ said in a press release that Alcon Pte Ltd “has committed to pay a criminal penalty of approximately $8.9 million.”


To resolve the SEC investigation, Novartis AG has reached an agreement pertaining to internal controls and books and records violations in Greece, Vietnam and South Korea. The violations in Greece pertain to the Lucentis-related conduct covered in the Novartis Hellas DPA as well as controls issues with Novartis Hellas post-approval studies identified by internal review in 2012 and resolved by 2013, according to the release. In Vietnam, the violations relate to the activities involving an Alcon distributor that are the subject of the Alcon DPA. And in South Korea, the violations “relate to conduct for which Novartis has already taken responsibility in South Korea, where the Company is in the final stages of resolving these issues with the local authorities,” according to the release. Finally, the SEC agreement addresses certain internal controls and books and records issues related to Alcon China’s placement of surgical devices.

“The agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas,” U.S. Attorney Carpenito said in the DOJ release. “Just as importantly, it includes a framework for compliance reforms that should ensure that these companies conduct their business legally moving forward.”

Novartis AG’s subsidiaries “profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”

Shannon Thyme Klinger, group general counsel of Novartis, said: “We are pleased that all outstanding FCPA investigations into the company are now closed. Today’s settlements represent another milestone in our commitment to resolving legacy compliance issues and ensuring that Novartis truly lives its values. We have implemented and continue to implement initiatives to ensure we operate with the same high ethical values wherever we do business, and we remain focused on building trust with society.”

According to the Novartis release: “Since the time periods at issue in these legacy investigations, Novartis has made significant changes to enhance its approach to ethics, risk, and compliance. The Company has strengthened its governance by adopting principles-based compliance policies, reinforced its speak-up culture so associates can more effectively raise concerns about potential misconduct, and combined its risk management and compliance functions to enable more effective risk management and mitigation efforts.”




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