Novartis Hellas S.A.C.I. was a Greek corporation that was a wholly-owned subsidiary of Novartis AG, a global pharmaceutical company based in Switzerland. Among other lines of business, Novartis Hellas sold and marketed Novartis-branded prescription drugs in Greece. Novartis securities were registered with the SEC and traded on the New York Stock Exchange. Novartis Hellas' books, records, and accounts were included in the consolidated financial statements of Novartis. Novartis was previously subject to an SEC administrative action in 2016 for its FCPA misconduct in China.
According to the documents in this case, between 2008 and 2015, Novartis Hellas engaged in a conspiracy to pay for health care professionals ("HCP") employed by state-owned and state-controlled hospitals and clinics in Greece to attend international health congresses. Paying for attendance to the congresses was intended as bribes to increase sales of Lucentis, a Novartis-branded prescription drug, in Greece. In addition to being bribes, the payments were falsely recorded in the company's books and records as legitimate expenses. In a separate scheme, Novartis Hellas caused certain other improper payments to HCPs related to an epidemiological study intended to increase sales of certain Novartis-branded prescription drugs to be falsely recorded in Novartis' books, records, and accounts. In all, Novartis Hellas recognized at least $71.48 million in profits from sales of Lucentis in Greece and from sales of Novartis-branded prescription drugs related to the epidemiological study.
On June 25, 2020, the DOJ filed a two count Information in the District of New Jersey against Novartis Hellas alleging conspiracies to violate the anti-bribery and books and records provisions of the FCPA. On the same date, Novarts Hellas and Novartis entered into a deferred prosecution agreement with the DOJ. Under the terms of the agreement, Novartis Hellas agreed to pay a fine of $225 million, which represented a 25% departure below a midpoint in the U.S. Sentencing Guideline range. Novartis also agreed to self report to the DOJ on the status of the company's enhanced anti-corruption compliance policies and procedures. While Novartis Hellas received full credit for its cooperation and remediation, due to Novartis status as a recidivist, the DOJ assessed the 25% departure from approximately the midpoint of the sentencing guidelines range rather than the bottom.
In a related proceeding, on June 25, 2020, the DOJ filed a single count Information in the District of New Jersey against Alcon Pte Ltd, a former subsidiary of Novartis, alleging a conspiracy to violate the books and records provisions of the FCPA. On the same date, Alcon Pte entered into a deferred prosecution agreement with the DOJ. Under the terms of the agreement, Alcon Pte agreed to pay a fine of $8,925,000, which represents a 25% departure below the bottom of the U.S. Sentencing Guidelines range. In determining the appropriate fine, the DOJ noted the company's cooperation and remediation. Per the terms of the agreement, Alcon Pte and Alcon Inc. agreed to self-report on the status of the companies' enhanced anti-corruption compliance policies and procedures.
In a related settled administrative action initiated on June 25, 2020, the SEC ordered Novartis to cease and desist its violations of the books and records and internal controls provisions of the FCPA. Under the terms of the proceeding, the SEC ordered Novartis to pay disgorgement of $92,300,000 and prejudgment interest of $20,500,000 and further ordered Novartis to self report to the SEC on the status of the company's enhanced anticorruption compliance policies and procedures.
