Pharma Bribery

A long form recap of Big Pharma's worldwide money making methods.  Big Pharma's 70%+ average gross profit margins are far higher than any other industry, save a few heavily leveraged financials. Here is how they turn in this glittering financial performance:

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Pharma bribery corrupts health care, puts patients at risk, new review warns
Kickbacks, sham studies and regulatory payoffs distort prescribing and drug approvals
By Pamela Ferdinand | March 25, 2026

In Greece, Novartis Hellas paid for physicians to attend international medical congresses and warned it would withdraw support if prescription quotas for its drugs were not met.

The subsidiary admitted misconduct in 2020 and agreed to pay $225 million in criminal penalties under a deferred prosecution agreement, as parent company Novartis AG entered a series of settlements with U.S. enforcement agencies to resolve Foreign Corrupt Practices Act (FCPA) violations abroad. Previously, in 2016, Novartis paid $25 million to resolve SEC civil charges over bribery in China, without admitting or denying the findings, according to the U.S. Securities and Exchange Commission (SEC).

Meanwhile, Pfizer subsidiaries in multiple countries, including Italy and Russia, were accused by the SEC in 2012 of paying bribes over about a decade to foreign officials to secure regulatory and formulary approvals, boost sales, and increase prescriptions, the SEC complaint shows. In China, one subsidiary allegedly created “points programs” that let doctors earn gifts based on prescribing its medications, according to the SEC, while in Croatia, another offered a “bonus program” that reportedly rewarded doctors with cash, international travel, or free products.

After voluntarily disclosing the misconduct in 2004 and cooperating with investigators, Pfizer and an indirect subsidiary agreed to pay more than $45 million in separate settlements, without admitting or denying the allegations, the SEC reported. In a parallel action, Pfizer H.C.P., an indirect, wholly-owned healthcare-focused subsidiary, agreed to pay a $15 million penalty to resolve its investigation of FCPA violations after admitting to improper payments to foreign government officials, according to the U.S. Department of Justice.

And in Greece, Poland, and Romania, Johnson & Johnson subsidiaries, employees, and agents were accused by regulators of using slush funds, sham contracts, and off-shore companies in the Isle of Man to reward doctors and administrators who ordered or prescribed its products, including surgical implants. The 2011 SEC complaint also accused the company of paying kickbacks in Iraq to obtain business.

Johnson & Johnson voluntarily disclosed some of the violations and conducted an internal investigation. Without admitting or denying the allegations, the company agreed to pay more than $48 million to settle the case and $21.4 million to resolve parallel DOJ criminal charges, SEC records show.

Together, these pharmaceutical companies, their subsidiaries, and others have reportedly paid at least $12.6 million in bribes to win drug approvals, boost sales, and secure government contracts, a new analysis of international enforcement records shows. The cases resulted in more than $1.1 billion in sanctions, often without admissions or denials of wrongdoing. Yet many alleged schemes designed to prioritize profits over patients persisted for years before they were uncovered.

From a public health perspective, the impact of pharmaceutical industry bribery extends well beyond financial penalties and corporate reputations, the study’s authors say. Corruption, they note, is harmful for patients, especially when companies seek to promote the sale of drugs with unproven or dangerous uses.

“It creates barriers to health services and products and compromises quality of products and care,” said lead author Jillian Kohler, a professor of Health Services and Policy Research at the University of Toronto and founding director of the WHO Collaborating Centre for Governance, Transparency and Accountability in the Pharmaceutical Sector. “In the worst case, corruption kills.”

Published last month [February 2026] in The Journal of Law, Medicine & Ethics, the review draws on reports published between 1999 and early February 2025 by the Organisation for Economic Co-operation and Development (OECD) Working Group on Bribery. The OECD does not directly investigate international business transactions but documents alleged bribery incidents and monitors enforcement under its Anti-Bribery Convention, which requires member states to criminalize foreign bribery.

The reports summarize cases provided by member states, including the United States, and are informed by on-site visits and consultations. (Cases involving medical devices were excluded from the review.)

While corruption and unethical practices in the pharmaceutical sector have been well documented, the study offers one of the most comprehensive cross-country snapshots of investigations and enforcement actions related to bribery in the global pharmaceutical industry. It points to systemic vulnerabilities in how medicines are approved, purchased, and prescribed worldwide, and highlights structural weaknesses in pharmaceutical oversight and enforcement.

The review also notes some common patterns:

• Bribery was often approved (or at least knowingly tolerated) by high-ranking managers.
• Intermediaries and complicated corporate structures obscured bribes, with subsidiaries, third-party vendors or shell companies disguising payments as legitimate transactions.

Among other harms, systemic bribery (including individual medical specialist payments not related to research) can distort prescribing patterns and reimbursement decisions, diverting resources toward higher-cost, lower quality or unnecessary drugs and treatments, which is damaging to patients both medically and economically, the researchers say.

“In the worst case, corruption kills.”

Bribes can also compromise regulations designed to ensure drug safety and efficacy, jeopardize clinical decision-making, and undermine trust in medical institutions and practitioners, the study’s authors say. Such impacts, they say, erode public confidence in medical institutions and can harm patient outcomes “when decisions are driven by financial incentives rather than medical need.”

The researchers say the scale of financial penalties underscores how improper practices can become institutionalized, while the wide range of concealment tactics highlights the complexity of detecting and prosecuting such misconduct.

Government officials, regulators, and health care providers were allegedly bribed through cash, gifts, luxury travel, and fraudulent research to gain market access, increase sales or influence prescribing, according to the study. Additional reported tactics, the authors say, included compensating officials under the guise of consulting or speaker fees, using charitable front groups, and making direct payments to inspectors or regulators.

“These findings underscore the systemic nature of bribery in the pharmaceutical sector and call for stronger oversight and accountability to protect public trust and equitable medicine access,” wrote Kohler and her co-authors.

“Bribery is not limited to one region; it was documented across a wide geographic spectrum. The repeated reliance on sham clinical studies, inflated distributor discounts, and disguised consulting contracts supports the idea that certain systemic weaknesses transcend national boundaries.”

The global scope of pharma bribery investigations

Researchers identified 21 investigations involving pharmaceutical companies and their subsidiaries in five OECD countries. The United States accounted for 14 cases, followed by Germany and Denmark with three each, and Greece and Italy with one each.

Other findings are:

• In total, 19 companies and many of their subsidiaries were implicated, including allegations against publicly named firms, including: BioTest, Novartis, Johnson & Johnson, Pfizer, Teva, Eli Lilly, Bristol-Myers Squibb, SciClone, Nordion, AstraZeneca, GlaxoSmithKline, Sanofi, and Novo Nordisk.
• Across the cases, the total timeframe of the investigations ran from 1994 to 2016. The longest, documented alleged scheme lasted 11 years, with the average persisting for nearly five years. Once uncovered, cases took more than four years on average to move from detection to prosecution.
• Alleged bribes amounted to at least $12.6 million, the review shows. Total financial sanctions reached more than $1.1 billion, including roughly $586 million in fines, $447 million in corporate disgorgement (repayment of profits linked to alleged misconduct) and roughly $77 million in prejudgment interest.
• The largest single sanction of more than $519 million for foreign bribery was imposed on Teva Pharmaceuticals in a 2016 deferred prosecution agreement to settle parallel civil allegations and criminal charges that it paid officials to win business in Russia, Ukraine, and Mexico. (Just two years earlier, a Chinese court fined GlaxoSmithKline nearly $500 million after finding its local subsidiary guilty of bribery.) “While the conduct that resulted in this investigation ended several years ago, it is both regrettable and unacceptable, and we are pleased to finally put this matter behind us,” said Teva’s Erez Vigodman in a 2016 statement. “Since becoming CEO, I have worked diligently to make our culture of compliance central to everything Teva does.”

The research review relied only on cases that advanced to official investigation and prosecution and were made public. Other incidents—for instance, those involving companies not listed on major exchanges or operating in countries with less rigorous enforcement—may never come to light, the authors say.

“The discrepancy between the small number of detected cases and the extensive use of sophisticated concealment methods suggests that the OECD [Anti-Bribery] Convention, while significant in principle, has had only a modest effect on curtailing opportunities for corruption,” they wrote.

Where and how bribes were allegedly paid

According to the review, alleged bribery payments were directed toward recipients in 30 countries across Eastern Europe, Asia, the Middle East, Latin America, and Africa. Many schemes targeted public hospitals and ministries of health in systems where governments play central roles in financing and procuring medicines.

“Bribery is not limited to one region; it was documented across a wide geographic spectrum.”

In the U.S., the Foreign Corrupt Practices Act (FCPA) generally prohibits bribery of officials in other countries to get or retain business and requires publicly traded companies to maintain accurate and transparent accounting. The FCPA also prohibits indirect bribes made to any person “knowing” that some or all of the payments will be used to bribe foreign officials or other prohibited recipients.

The researchers categorized bribery cases into three types, with varying degrees of health risks for patients and consumers:

• Boosting profits without directly compromising drug quality, such as paying prescribers to favor certain approved drugs, potentially steering decisions away from cost-effective or optimal care.
• Bypassing regulatory scrutiny to boost the sale of falsified, substandard, adulterated or unapproved drugs, creating direct public health risks. In these cases, bribes were paid to inspectors, regulators or supply chain actors to ignore safety and manufacturing violations.
• Combining profit-driven motives with drug quality or misuse risks, such as off-label marketing or securing approvals without full review, which increase sales while exposing patients to unproven or dangerous uses. For instance, pharmaceutical sales teams, incentivized by bonuses, promoted drugs for uses not supported by evidence, or bribed officials to overlook inadequate clinical testing.

Common pharma bribery tactics, up and down the corporate ladder

Schemes targeted publicly and privately employed physicians, nurses, pharmacists, hospital administrators, government health staff, and others, the study reports. Customs officials, members of parliament, and employees of state-run procurement agencies were also implicated. In at least one instance, consultants from the United Nations Development Program (UNDP) were involved.

“Across cases, company employees at every level from frontline sales and distributor personnel to middle managers, local executives, and even high-ranking corporate officers were directly complicit in planning, executing, or approving bribery strategies. Senior managers authorized inflated payments or disguised expense claims,” Kohl and her colleagues wrote.

“At times, executives approved false documentation or misrepresented financial transactions in official records and audits, and lower-level sales representatives regularly funneled funds or gifts, meticulously tracking prescription volumes or purchase orders to justify continued bribes. Frequent internal warnings and compliance reviews, which spotlighted obvious red flags in accounting and documentation, were often ignored or treated as isolated incidents.”

In one case, Bristol-Myers Squibb’s joint venture in China reaped more than $11 million in profits from alleged misconduct that included faking invoices, receipts, and purchase orders to fund improper payments to health care providers in exchange for prescription sales, the SEC alleged. Without admitting or denying the findings, the company agreed in 2015 to pay more than $14 million to settle charges that it violated the FCPA’s internal controls and recordkeeping provisions.

Sponsorships, travel, gifts and entertainment

Pharmaceutical companies frequently paid for healthcare professionals to attend congresses, conferences, and educational events, the study reports. However, investigations found these payments were “often inflated or included lavish, non-work-related perks such as shopping trips, sightseeing tours, and family travel, leading to their classification as bribes,” the reviewers write. Some companies provided personal loans to doctors with no repayment expectation or transferred cash directly to their bank accounts.

Beyond travel-based incentives, alleged schemes featured weekend retreats to spas, bathhouses, and karaoke bars pitched as educational seminars or symposia. Luxury items such as cameras, jewelry, and expensive wine were provided alongside smaller perks like shopping vouchers and electronics, the review shows. “In such cases, sales teams meticulously tracked each health care professional’s prescription volume to ensure a return on investment,” the reviewers write.

Falsified or manipulated clinical studies and research

Some companies set up fraudulent or low-value clinical studies—sometimes labeled as “Phase IV,” “observational,” or “epidemiological” studies—to funnel money to health care professionals. Sales representatives also recruited physicians who prescribed certain drugs, paying them “study fees” or for “data collection,” though paperwork was “often incomplete or deliberately misleading,” according to the review.

Novartis Greece, for instance, used an epidemiological study to boost prescription drug sales, not for genuine research, according to the U.S. Justice Department. Employees made improper payments between 2009 and 2010 to health care providers, recognizing that many believed they were paid to prescribe, not provide clinical data, federal prosecutors said.

Consulting, speaker fees, and medical roundtables

Hiring health care providers or government officials under titles such as “consultants,” “speakers,” or “Key Opinion Leaders” was another common tactic, the researchers note. “Individuals were paid for little or no actual work while the expenditures were classified as ‘advisory services,’ ‘lecture fees,’ or ‘professional consulting,'” the reviewers write.

“We strongly caution company officials from averting their eyes from what they do not wish to see.”

For instance, Teva, a leading manufacturer of generic pharmaceutical products, engaged a senior Ukrainian government health official as the company’s “registration consultant” between 2011 and 2011, according to the U.S. Department of Justice. It paid him a monthly fee and provided him with travel and benefits worth $200,000 to influence government approval of Teva products, including insulins and the multiple sclerosis drug Copaxone®. Teva and its wholly-owned subsidiary in Russia admitted paying bribes to the official as part of its 2016 deferred prosecution agreement.

Some companies held “medical roundtables” and paid healthcare providers honoraria, sometimes routing funds through third-party journals (labeled as advertising) that were then funneled to attendees or speakers. Because the events were billed as external meetings, they often bypassed internal compliance or due diligence controls.

“Like other ‘consultancy’ arrangements, these roundtable payments served as covert bribes that were recorded in corporate books as legitimate marketing or professional fees,” the researchers wrote.

Distributor discounts, credit notes, and margin manipulation

Some companies gave excessive discounts or credit notes to distributors, who used the surplus to bribe doctors or government officials, the reviewers write. These payments, used to boost prescriptions or secure contracts, were falsely recorded as marketing or margin expenses, which concealed the bribe payments.

In Brazil, Lilly’s subsidiary gave excessive distributor discounts, enabling markups that concealed bribes to government officials to purchase Lilly products, the SEC alleged. One distributor allegedly used $70,000 (6% of sales) to secure $1.2 million in purchases, and the Lilly Brazil sales and marketing manager who requested the discount allegedly aware of the arrangement, according to the SEC.

As part of a broader civil settlement to resolve reported FCPA violations between 1994 and 2009 related to its affiliates, Eli Lilly announced it agreed in 2012 to pay more than $29 million without admitting or denying the allegations. It also agreed to an independent review of its internal controls and FCPA compliance.

“Lilly requires our employees to act with integrity with all external parties and in accordance with all applicable laws and regulations,” said Anne Nobles, Lilly’s chief ethics and compliance officer in a statement at the time. “Since ours is a business based on trust, we strive to conduct ourselves in an ethical way that is beyond reproach.”

Bribery of government officials

Pharmaceutical companies also have been accused of bribing public officials directly or through intermediaries to accelerate regulatory approvals, speed product registrations or secure government contracts, the review shows. Payments were hidden through inflated contract prices, forged consulting agreements, or manipulated marketing budgets.

For instance, Eli Lilly’s subsidiary in Russia was accused by the SEC of paying millions of dollars to offshore entities for alleged “marketing services” to drive drug sales among pharmaceutical distributors and government bodies. About $2 million went to an offshore entity belonging to a government official, while another $5.2 million went to entities owned by someone closely connected to an important member of Russia’s parliament, the SEC alleged. Though the company became aware of violations, the arrangements continued for years, federal investigators said.

The company reached a civil settlement with the SEC as part of the 2012 compliance agreement, without admitting or denying the allegations, and the SEC noted that improvements to its global anti-corruption compliance program since the initial complaint.

“When a parent company learns tell-tale signs of a bribery scheme involving a subsidiary, it must take immediate action to assure that the FCPA is not being violated,” said Antonia Chion, associate director in the SEC enforcement division at the time. “We strongly caution company officials from averting their eyes from what they do not wish to see.”

United Nations program kickbacks

Under the United Nations Oil-for-Food Program, later placed under Iraqi control, pharmaceutical companies were required to sell products to Iraq through an UN-supervised system intended to provide humanitarian relief. The review identified pharmaceutical companies that inflated contract prices and funneled the excess as disguised “agent commissions” to Iraqi ministries.

“These payments were falsely recorded as legitimate fees or marketing costs while the companies recovered the padded amounts from the UN escrow fund,” the authors wrote.

Johnson & Johnson’s subsidiaries and pharmaceutical agent was accused in 2011 by the SEC of allegedly paying more than $850,000 in kickbacks demanded by Iraqi ministries to receive contracts and disguising the illicit payments as legitimate commissions, according to the SEC complaint. J&J voluntarily disclosed some of the violations by its employees and conducted an internal investigation, according to the SEC.

Without admitting or denying the allegations, the company agreed to pay $70 million to settle the case and parallel criminal charges by the U.S. Department of Justice, including separate allegations of bribes to doctors in Greece, Poland, and Romania, the SEC reported.

“These findings underscore the systemic nature of bribery in the pharmaceutical sector.”

Novo Nordisk, a leading supplier of insulin at the time of the program, acknowledged responsibility for its agent paying roughly $1.4 million in improper payments to the former Iraqi government by inflating the price of contracts before submission to the United Nations for approval, then inaccurately recording them as “commissions.” The company agreed to pay a $9 million penalty in connection with the scheme as part of a deferred prosecution agreement, U.S. Department of Justice records show. It also settled related allegations with the SEC, without admission or denial.

Shell companies, pass-through vendors, and false invoicing

Other techniques were widely used by intermediaries to create fraudulent invoices for nonexistent services such as “advertising,” “storage,” “consulting” or “marketing,” the analysis found. “In some cases, vague descriptions such as ‘distribution freight’ were used to funnel funds to officials or doctors without raising immediate red flags,” the reviewers wrote.

Charitable or philanthropic fronts

Pharmaceutical companies also allegedly disguised bribes as charitable donations or contributions to philanthropic foundations connected to public officials. Internal emails and documentation explicitly referred to these payments as quid pro quo arrangements for regulatory approvals or favorable reimbursement decisions, the reviewers say.

For example, Eli Lilly’s subsidiary in Poland was accused of transferring $39,000 to a high-ranking health official’s small charitable foundation in return for the official’s support for placing Lilly drugs on the government reimbursement list, the SEC alleged in a 2012 complaint. The payments were falsely characterized for computer purchases and conferences, which never took place, according to the complaint.

Without admitting or denying the SEC’s allegations, the company agreed to a final judgment permanently enjoining it from violating the FCPA as part of a wider settlement, SEC records show. It also agreed to pay more than $29 million in financial penalties and related payments.

Small penalties vs big profits

Foreign bribery by pharmaceutical companies persists, the researchers say, because the risk of detection is low, and the expected cost of being caught — the amount of a bribe and the risk of penalties from one — is often low relative to increased revenues. For example, Johnson & Johnson’s agreement to pay $70 million in financial penalties, without admitting or denying the SEC’s allegations, occurred the same year it reported earning $65 billion in sales — and years after the SEC alleged bribery schemes by its subsidiaries in four countries began.

In 2023, the DOJ and SEC resolved 14 FCPA actions across all industries with total sanctions of approximately $571 million—a significant decrease from the prior year when 10 actions yielded more than $1.68 billion in corporate penalties, according to the most recent data compiled by the multinational law firm A&O Shearman in its annual report. As discounts for cooperation and compliance rose, the average penalty dropped to nearly $44 million in 2023, down from an average of $168 million in 2022 and a peak of $686 million in 2020.

“In short, pharmaceutical companies as rational profit maximizers (irrespective of legality) will compare the potential gains from bribery against the expected cost of being caught and punished,” the researchers wrote. “Lengthy delays between scheme initiation and their detection and prosecution, coupled with the potential to contest charges, reduce the effective expected cost of corrupt practices. As a result, high financial penalties do not necessarily translate into meaningful deterrence against corruption.”

The same calculation may be true domestically, suggests a research letter published earlier this month [March] in JAMA Network Open. Researchers found that pharmaceutical manufacturers fined by the U.S. government for illegal kickbacks paid penalties equal to just 2.2% of their sales earned from selling drugs that were implicated in violations over the past 25 years. The total penalties were about $10.2 billion, while U.S. revenue during that same period totaled roughly $459 billion, they say.

Alleged schemes typically involved paying doctors to prescribe federally reimbursed drugs, the researchers say, and criminal prosecution under the U.S. Anti-Kickback Statute was uncommon.

“Moreover, all cases were resolved through negotiated settlements, likely due to resource constraints and uncertainty of judicial judgment, which also makes settlement more predictable for manufacturers. Thus, our findings suggest that AKS settlements may be economically tolerable for some pharmaceutical manufacturers and function as a cost of doing business,” the new study concludes. The median time from alleged misconduct to settlement was 3.8 years.

Calls for broad structural reforms

OECD reports on which last month’s expansive review is based include only pharmaceutical bribery schemes made public through official investigations. Enforcement also varies widely across countries, creating what the researchers describe as “a ‘dark figure’ of corruption that is never formally documented.” And intricate financial arrangements, incomplete reporting, a fragmented health system “outmatched” by the global reach of pharmaceutical firms, and limited public disclosures often obscure misconduct, they say.

Added to that, after temporarily suspending enforcement of the Foreign Corrupt Practices Act last year, the Trump Administration has signaled potential changes to enforcement priorities, including a substantially smaller team at the Justice Department and a shift in priorities to national security threats.

What is needed, Kohl and her colleagues argue, are more proactive monitoring and audit mechanisms, including enhanced due diligence and tighter oversight of distributors, local agents, and third parties, as well as mandatory transparency in intermediary relationships, such as public disclosure of service fees and clinical trial data.

The authors also urge structural reforms, including:

• Expanding independent financing for clinical trials
• Improving transparency through data analytics, AI risk detection, and automated financial tracking
• Mandating disclosure of industry payments to healthcare providers
• Reducing regulators’ reliance on industry financing
• Strengthening whistleblower protections

“These findings underscore the systemic nature of bribery in the pharmaceutical sector,” they wrote, “and call for stronger oversight and accountability to protect public trust and equitable medicine access.”

Reference

Kohler J, Khan A, Bowra A. Bribery and the Global Pharmaceutical Industry: An Exploration of Patterns and Penalties in the Organisation for Economic Cooperation and Development Reports. Journal of Law, Medicine & Ethics. Published online 2026:1-11. doi:10.1017/jme.2026.10237