Lessons Learned From Pfizer's Settlement Of FCPA Claims

On August 7, Pfizer H.C.P., an indirect wholly-owned subsidiary of Pfizer, Inc., entered into a two-year deferred prosecution agreement ("DPA") with the Department of Justice ("DOJ"), resolving FCPA violations in Bulgaria, Croatia, Kazakhstan, and Russia. In a related matter, Pfizer Inc. and Wyeth LLC, which Pfizer Inc. acquired in 2009, reached settlements with the Securities and Exchange Commission ("SEC"), resolving concerns in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia.

In its announcement of the settlement, the DOJ recognized "the significant efforts the company made to eliminate such improper practices, not only by implementing compliance reforms, but also by assisting U.S. authorities in our ongoing FCPA investigations of other companies and individuals." The DPA emphasized Pfizer's timely voluntary disclosure; its thorough and wide-reaching self-investigation of the underlying and related conduct; the "extraordinary" cooperation provided by the company to the DOJ and the SEC; its early and extensive remedial efforts; and the substantial and continuing improvements Pfizer has made to its global anti-corruption compliance procedures.

This Alert outlines some of the unique components of Pfizer's settlements and how they differ from other recent settlements, such as the requirements tailored to Pfizer's existing compliance program, the emphasis on Pfizer's internal investigation and remediation and the evolution in the U.S. Government's view of due diligence.

Pfizer's Compliance Commitments

Settlements with the U.S. Government typically include an appendix that outlines the standard, "best practices" compliance commitments to be undertaken by the company. While those compliance standards generally are included in Pfizer's settlements, the addenda to Pfizer's settlements largely reflect the Government's approval of Pfizer's extensive compliance program. Attachment C.1, for example, describes recognized best practices for compliance programs identical to those in last year's Johnson & Johnson ("J&J") DPA (that settlement was discussed in the Firm's April 2011 Stay Current).

As with the J&J DPA and other recent DPAs, Attachment C.1 acknowledges that Pfizer already had many standard best practices in place; a second addendum sets out enhanced compliance obligations largely tailored to Pfizer's existing compliance program. Indeed, the majority of the requirements in Attachment C.2 note Pfizer's strong...