Source: https://www.scribd.com/document/102319876/U-S-v-Pfizer-HCP-Corporation-Deferred-Prosecution-Agreement
Timestamp: 2018-05-22 20:16:40
Document Index: 438162382

Matched Legal Cases: ['§ 2', '§ 8', '§ 8', '§ 8', '§ 8', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78']

U.S. v. Pfizer HCP Corporation (Deferred Prosecution Agreement) | Pfizer | Evidence (Law)
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Defendant Pfizer H.C.P. Corporation( "Pfizer HCP"), by pursuant to authority granted by the Board of Directors of
its undersigned attorneys,
Pfizer HCP, and the United States "Department"), enter into this
Department of Justice, Criminal Division, Fraud Section (the
defei7ed prosecution agreement (the "Agreement"). The terms and conditions of this Agreement are as follows: Crnflaainal Inffo~anation and Accet~tance of I~esp 1. Pfizer HCP acknowledges and agrees that the Department
will file the attached two count the District of Columbia
criminal Information in the United States District Court for charging a conspiracy to commit an offense against the
United States, in violation of the Practices Act
anti-bribery and books and records provisions of the Forei gn Corrupt "FCPA"), Title 15, United States Code, Sections 78dd-2(a) ( doing, Pfizer HCP: (a) knowingly waives its right to indic
and 78m(b)(2)(A). In so
tment on these charges, as well t to the United States
as all rights to a speedy trial pursuant to the Sixth Amendmen Constitution, Title 18, United States Code, Section 3161,
and Federal Rule of Criminal
Procedure 48(b); and (b)knowingly waives any objection
with respect to venue and the ternls of this Agreement,
consents to the filing of the Information, as provided under in the United States District Court for the District of Colum 2. Pfizer HCP admits, accepts, and acknowledges that it
is responsible for the acts of its on, and as set forth in the
officers, employees and agents as charged in the Infornlati Statement of Facts attached hereto as Attachment A
and incorporated by reference into Information acid the facts
this Agreement, and that the allegations described in the
described in Attachment A are true and accurate. Shou ld the Department pursue the prosecution that is deferred by this Agreemenf, Pfizer HCP contest the admissibility of nor contradict the Statement including any guilty plea or sentencing proceeding. Term off the Agreement This Agreement is effective for a period beginning on the is filed and ending.two (2) years and seven (7) calendar date on which the Information agrees that it will neither
of Facts in any such proceeding,
days from that date (the "Term") rtment determines, in its sole
However,Pfizer HCP agrees that, in the event that the Depa discretion, that Pfizer HCP has knowingly violated any extension or extensions of the term of the Agreement
provision of this Agreement, an
may be imposed by the time period of one year,
Department, in its sole discretion, for up to a total addit ional without prejudice to the Department's right to proceed
as provided in Paragraphs 16-19 Agreement for an sole discretion,
below. Any extension of the Agreement extends all terms ofthis
equivalent period. Conversely, in the event the Bepa rtment finds, in its that there exists a change in circumstances, the Term terminated early.
of the Agreement maybe
~televan~ ~'oa~~~de~-a~~o~s 4. The Department enters into this Agreement based on the individual facts and
circumstances presented by this case. The Department enters into this Agreement based, in part, on the following factors: (a) the extraordinary coope parent company,Pfizer Inc., "Pfizer }, with the Departme ( " Exchange Commission "SEC"), including thorough ( ration ofPfizer HCP's
nt and the U.S. Securities and
and responsive reporting of potential
violations, including the conduct of other companie and s individuals;(b)Pfizer's initial voluntary disclosure of potential improper payments and the timely and complete as facts relating to potential ified by its compliance
disclosure of the facts described in Attachment A, as well
improper payments in various countries that had been ident program, internal audit function and global internal inves related misconduct;(c)the early and extensive remedial
tigations concealing bribery and
efforts undertaken by Pfizer, r has made to its global anti-
including the substantial and continuing improvements Pfize corruption compliance procedures;(d)Pfizer's agreemen
t to maintain ananti-corruption including Pfizer HCP,to
compliance program for all of its subsidiaries worldwide, continue in its efforts to implement enhanced compl
iance measures, as described in ts on its
Attachments C.l and C.2, and to provide to the Departme nt written repor progress and experience in maintaining and enhancing
its compliance policies and
procedures, as described in Attachment C.3. The repor ts will likely include proprietary, financial, confidential, and competitive business infor mation. Moreover, public impede pending or potential
disclosure of the reports could discourage cooperation, government investigations and thus undermine the
objectives of the reporting contents thereof are
requirement. For these reasons, among others, the reports and the intended to remain and shall remain non-public, except
as otherwise agreed to by the
parties in writing, or except to the extent that the Department
determines in its sole tments discharge of its
aiscretion that disclosure would be in furtherance of the Depar duties and responsibilities or is otherwise required by law. 5.
Pfizer HCP shall continue to cooperate fully with the Department
iii any and all matters al controls,
relating to corrupt payments and related false books and records and intern
subject to applicable law and regulations. At the request ofthe Department, and consistent with applicable law and regulations, Pfizer HCP shall such other domestic or foreign law enforcement authorities and also cooperate fully with
agencies, as well as the of Pfizer HCP or any of
Multilateral Development Banks "MDBs"), in any investigation (
its present and former officers, directors, employees, agents, consul tants, contractors, subcontractors, and subsidiaries, or any other party, in any and all corrupt payments, related false books and records, and inadequate matters relating to internal controls, and
in such manner as the parties may agree. Pfizer HCP agrees that its cooperation shall include, but is not limited to, the following: Pfizer HCP shall truthfully disclose all factual information not protected by a with respect to its
valid claim of attorney-client privilege or work product doctrine activities and those of its present and former directors, emplo
yees, agents,
consultants, contractors and subcontractors, and subsidiaries concer ning all matters relating to corrupt payments and related false books and inadequate internal controls, about which Pfizer HCP has any records and
knowledge or about
which the Department may inquire. This obligation of truthful disclosure includes the obligation of Pfizer HCP to provide to the Department, upon document, record or other tangible evidence relating to such request, any
corrupt payments,
false books and records, or inadequate internal controls about which I3eparlment may inquire of Pfizer HCp. b.
Upon request of the Department, with respect to any issue relevant to investigation of corrupt payments in corulection with the operations HCP, related false books and records, and inadequate internal contro HCP shall designate knowledgeable employees, agents or attorneys
ofPfizer ls, Pfizer
to provide to 5(a) above,
the Department the information and materials described in Paragraph on behalf of Pfizer HCP. It is further understood that Pfizer HCP times provide complete, truthful, and accurate information. c. With respect to any issue relevant to the Department's investigatio payments, related false books and records, and inadequate internal connection with the operations of Pfizer HCP, or any of its presen
must at all
n of corrupt controls in
t or former available for
subsidiaries ar affiliates, Pfizer HCP shall use its best efforts to make interviews or testimony, as requested by the Department, present
or former as well as the and
officers, directors, employees, agents and consultants of Pfizer HCP officers, directors, employees, agents and consultants of contractors
subcontractors. This obligation includes, but is not limited to, sworn testimony before a federal grand jury or in federal trials, as well as interv iews with federal
law enforcement and regulatory authorities. Cooperation under this paragraph shall include identification of witnesses who, to the knowledge of may have material information regarding the matters under d. Pfizer HCP,
investigation. other tangible
With respect to any information, testimony, documents, records or evidence provided to the Department pursuant to this Agreement, consents to any and all disclosures, subject to applicable law and
Pfizer HCP
regulations, to
other gove.nmental authoritiies, including United States
authorities and those of a Department, in its
foreign ~overntnent,-and the MDBs, of such materials as the sole discretion, shall deem appropriate. Pavrnent of T~I~netary Penalty 6. The Department and Pfizer HCP agree that applicatio
n ofthe 2011 United States
Sentencing Guidelines "USSG" or "Sentencing Guide ( lines")to determine the applicable fine range yields the following analysis: • Offense Level. Based upon USSG § 2C1.1, the total offense level is calculated as follows: (a)(2) (b)(1) (b)(2) Base Offense Level Offense involved more than one bribe Value of benefit received more than $7,000,000 TOTAL • Base Fine. Based upon USSG § 8C2.4(a)(2), the base fine is $28,5 00,000. ~ 12 +2 + 20 34
Cul~abili Score. Based upon USSG § 8C2.5, the culpability score is 4, calculated as follows: (a) (b)(2) Base Culpability Score The organization had 1000 or more employees and an individual within high-level personnel of the organizati on participated in, condoned, or was willfully ignorant of the offense The organization, prior to an imminent threat of discl osure or government investigation, within a reasonably prom pt time after becoming aware of the offense, reported the offense, fully cooperated, and clearly demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct. TOTAL 5 +4
Calculation of Fine Range: Base Fine Multipliers Fine Range 7. $28,500,000 8(min)/ 1.6 (max) $22,800,000 / $45,600,000 pursuant to USSG
In addition, the Government agrees that a downward departure, § 8C4.1 is warranted for substantial assistance in the investigat others. Thus, taking into account all relevant factors described in parag Government and Pfizer HCP agree that $15,000,000 is the
ion or prosecution of
raphs 4 to 7, the
appropriate monetary penalty, fine range.
which is a 34 reduction off the bottom of the recommended Guidelines .Pfizer HCP and the Department agree that this fine is appro
priate given the nature and ofthe misconduct at issue, matter, Pfizer's
extent of Pfizer's voluntary, prompt and thorough disclosure
the nature and extent of Pfizer's extensive cooperation in this cooperation, pursuant to USSG § 8C4.1, in the Department misconduct in the industry, and Pfizer's extraordinary and 9.
's investigation into other ongoing remediation. of $15,000,000 to the U.S.
Pfizer HCP agrees to pay a monetary penalty in the amount Treasury within ten(10) days of the execution of the Agree
ment. The $15,000,000
penalty is final and shall not be refunded. Furthermore, nothi ng in this Agreement shall be deemed an agreement by the Department that $15,000,00 0 is the maximum penalty tment is not precluded from a higher fine, although the
that maybe imposed in any future prosecution, and the Depar
arguing in any future prosecution that the Court should impose Department agrees that under those circumstances, it will
recommend to the Court that st any one the Court
any amount paid under this Agreement should be offset again
imposes as part of a _future judgment. Pfizer HCP acknowledg es that no tax deduction maybe sought in connection with the payment of any part of this Conditional Re~_ease from Crirnin~l I,iabila~y 10. In return for the full and truthful cooperation ofPfizer HCP, and its compliance with the , subject to Paragraphs 15 $15,G~0,000 penalty.
terms and conditions of this Agreement, the Department agrees to 18 below, not to use any information related to the condu
ct described in the attached case, except: (a} in a
Statement of Facts against Pfizer HCP in any criminal or civil prosecution for perjury or obstruction ofjustice;(b)in a
prosecution for making a false ng to any crime of violence; or ion of any provision of Title 26 herein,
statement;(c)in a prosecution or other proceeding relati
(d)in a prosecution or other proceeding relating to a violat
of the United States Code. In addition, the Department agrees , except as provided that it will not bring any criminal case against Pfizer HCP
or any of its wholly owned or former officers, directors, rs, as described in
controlled subsidiaries related to the conduct of present and
employees, agents, consultants, contractors and subcontracto Attachment A, or relating to information Pfizer disclo date on which this Agreement was signed. a.
sed to the Department prior to the
This paragraph does not provide any protection against
prosecution for any future internal controls, if any, Pfizer HCP pursuant to
conitpt payments, false books and records, or inadequate made by Pfizer HCP irrespective of whether disclosed by the terms of the agreement. b.
In addition, this paragraph does not provide any protection
against prosecution for in Attachment A or
any corrupt payments made in the past that are not described that were not disclosed to the Department prior to the effect Agreement.
ive date of this
In addition, this Paragraph d~Ps not provide
protection against prosecution of any shareholder, agent, consul ant, violations committed by them.
prese?lt or former officer, director, employee,
contractor, ar subcontractor ofPfizer HCP for any Corporate C~na~li~nce Pro~r~m 11. As indicated in Attachment C,Pfizer HCP's pare
nt company, Pfizer, represents that it has ethics program designed
implemented and will continue to implement a compliance and to prevent and detect violations of the FCPA, tluoughout its operations, including its agen
and other applicable anti-corruption laws
ts and business partners (as defined in es shall not be construed
Attachment C.1). Implementation of these polic ies and procedur in any future enforcement proceeding as providin not disclosed to the Department as of the
g immunity or amnesty for any crimes
date of signing of this Agreement for which
Pfizer HCP would otherwise be responsible. 12. In order to address any deficiencies in its internal set forth in Attachment C, Pfizer HCP's parent controls, policies, and procedures, as
company, Pfizer, represents that it has future, in a manner consistent with all
undertaken, and will continue to undertake in the of its obligations under this Agreement, revi
ews of its existing internal controls, policies, FCPA and other applicable anti-corruption new or modify existing internal
and procedures regarding compliance with the
laws. Where necessary and appropriate, Pfizer will adopt controls, policies, and procedures in order to ensu suUsidiaries, including Pfizer HCP maintain
re that Pfizer and its worldwide
: (a) a system of internal accounting cont rols and accurate books, records, and
designed to ensure the making and keeping of fair
accounts; and (b) a rigorous anti-corruption comp liance code, standards, and procedures designed to detect and deter violations of the FCPA and other applicable anti-corruption code, standards, and procedures will
laws. The internal controls system and complian ce
include, but not be limited to, the min~~num elements-set forth C.2. Corporate Com~li~nce ~e~ortir►g 13. As indicated in Attachment C.3, Pfizer HCP's parent compa
in Attachments C.1 and
ny, Pfizer, agrees that it will
report to the Department during the term ofthe Agreement regarding remediation and implementation of certain compliance measw-es described in I)efe~rred Prosecution 14. In consideration o£ (a) the past and future cooperation of Pfizer HCP and Pfizer described in Paragraphs 4 and 5 above;(b)Pfizer HCP's payment of of $15,000,000;(c)Pfizer's and Pfizer HCP's adoption and as Attachments C.1 and C.2.
a monetary penalty
maintenance of remedial compliance undertakings prosecution of
measures, and review and audit of such measures, including the
described in Attachments C.1 and C.2, the Department agrees that any Pfizer HCP for the conduct set forth in Attachment A, and
for the conduct that Pfizer g of this Agreement, be
HCP and Pfizer disclosed to the Department prior to the signin and hereby is deferred for the Term of this Agreement. 15.
The Department further agrees that if Pfizer HCP fully complies
with all of its obligations al prosecution against
under this Agreement, the Department will not continue the crimin
Pfizer HCP described in Paragraph 1 and, at the conclusion of the Term, this Agreement shall expire. Within thirty(30) days of the Agreement's expira tion, the Depar seek dismissal with prejudice of the criminal Information filed described in Paragraph 1. ~re~ch of the r-~~reernent 16. If, during the Term of this Agreement, the Department determ that Pfizer HCP has:(a) committed any criminal violation ines, in its sole discretion, tment shall
against Pfizer HCP
of United States law after the
signing of this r"~greement;(b) at any time provided deiiberate?y false, incomplete, or misleading information; or (c) otherwise breached the Agreement, Pfizer HCP shall thereafter be subject to prosecution for any federal criminal ~~iolation of which the Department has knowledge, including the charges in the Information described in Paragraph 1, which may be pursued by the Department in the United States District Court for the District of Columbia. Any such prosecution maybe premised on information provided by Pfizer and Pfizer HCP. Any such prosecution that is not time-barred by the applicable statute of limitations on the date of the signing of this Agreement maybe commenced against Pfizer HCP notwithstanding the expirataion of the statute of limitations between the signing of this Agreement and the expiration of the TerYn plus one year. Thus, by signing this Agreement, Pfizer HCP agrees that the statute of limitations with respect to any prosecution that is not time-barred on the date of the signing of this Agreement shall be tolled for the Tern1 plus one year. 17. Iii the event that the Department determines that Pfizer HCP has breached this Agreement, the Department agrees to provide Pfizer HCP with written notice of such breach prior to instituting any prosecution resulting from such breach. Pfizer HCP shall, within thirty(30) days of receipt of such notice, have the opportunity to respond to the Department in writing to explain the nature and circumstances of such breach, as well as the actions Pfizer HCP has taken to address and remediate the situation, which explanation the Department shall consider in determining whether to institute a prosecution. 18. In the event that the Department determines that Pfizer HCP has breached this Agreement: (a) all statements made by or on behalf of Pfizer and Pfizer HCI'to the Deparhnent or to the Court, including the attached Statement of Facts in Attachment 11 A,
and any testimony given by Pfizer and Pfizer HCP before a
grand jury, a court, or any quent to this Agreement, or admissible in evidence in t Pfizer HCP; and
tribunal, or at any legislative hearings, whether prior or subse any leads derived from such statements or testimony, shall be
any and all criminal proceedings brought by the Department agains (b) Pfizer HCP shall not assert any claim under the United
States Constitution, Rule 11(~ l Rules of Evidence,
of the Federal Rules of Criminal Procedure, Rule 410 of the Federa or any other federal rule, that statements made by or on behal prior or subsequent to this Agreement, and any leads derive
f of Pfizer and Pfizer HCP
d therefrom, should be t director or
suppressed. The decision whether conduct or statements of any curren employee, or ally person acting on behalf of, or at the direction will be imputed to Pfizer HCP for the purpose of determinin
of, Pfizer and Pfizer HCP,
g whether Pfizer HCP has tion. of the
violated any provision of this Agreement shall Ue in the sole discre Department. 19. Pfizer HCP aciciiowledges that the Department has made no or promises concerning what sentence maybe imposed by
representations, assurances,
the Court if Pfizer HCP Pfizer HCP further tion of the Court and that se of such discretion.
breaches this Agreement and this matter proceeds to judgment. acknowledges that any such sentence is solely within the discre
nothing in this Agreement binds or restricts the Court in the exerci Sale or l~~Iea-~er of Pfizer I3CP 20. Pfizer HCP agrees that in the event it sells, merges, or transfers
all or substantially all of whether such sale is
its business operations as they exist as of the date of this Agreement, structured as a stock or asset sale, merger or transfer, it shall includ sale, merger, or transfer a provision binding the purchaser, thereto, to the obligations described in this Agreement.
e in any contract for
or any successor in interest
Pa~blac Sta~e~ra~~ ~~ l~fizep 21.
~'~ or future attcine_ys, officers, speak for Pfizer HCP g the acceptance of
Pfizer HCP expressly agrees that it shall not, through present
directors, employees, agents or any other person authorized to
make any public statement, in litigation or otherwise, contradictin responsibility by Pfizer HCP set forth above or the facts descri
bed in the attached
Statement of Facts in Attachment A. Any such contradictory statement shall, subject to cure rights of Pfizer HCP described below, constitute a breach of this Agreement and in Paragraphs 15-18 of n
Pfizer HCP thereafter shall be subject to prosecution as set forth
this Agreement. The decision whether any public statement by any such perso contradicting a fact contained in the Statement of Facts will be
imputed to Pfizer HCP for ment shall be at the
the purpose of determining whether they have breached this Agree
sole discretion of the Department. If the Department determines that a public statement by any such person contradicts in whole or in part a statement contained in the Statement HCP may avoid a breach five (5)business days above, Pfizer
o#~ Facts, the Department shall so notify Pfizer HCP,and Pfizer
of this Agreement by publicly repudiating such statements) within
after notification. Consistent with the obligations of Pfizer HCP as set forth HCP shall be permitted to raise defenses and to assert affirmative
claims in civil and of Facts. This
regulatory proceedings relating to the matters set forth in the Statement paragraph does not apply to any statement made by any present Pfizer HCP in the course of any criminal, regulatory, or civil
or former employee of
case initiated against such HCP.
individual, unless such individual is speaking on behalf of Pfizer 22. Pfizer HCP agrees that if it or any of its direct or indirect affilia
tes or subsidiaries issues a Agreement, Pfizer
press release or holds any press conference i1i connection with this HCP shall first consult the Department to determine:(a) wheth
er the text of the release or
proposed statements at the press conferen ce between the Department and Pfizer HCP objection to the release. 23. The Deparhnent, if requested to do so,
are true and accurate with respect to ~o
; aild (b) whether the Department has
agrees to bring to the attention of gove
rnmental re of the and ion to
and other debarment authorities the fact
s and circumstances relating to the natu
conduct underlying this Agreement, incl
uding the nature and quality ofPfizer's
Pfizer HCP's cooperation and remediation. debarment authorities, the Department
By agreeing to provide this informat
is not agreeing to advocate on behalf
ofPfizer and y by the
Pfizer HCP,but rather is agreeing to prov debarment authorities.
ide facts to be evaluated independentl
Limitations on ~indin~ Effect of Agreem 24. This Agreement is binding on Pfizer HCP
ent not
and the Department but specifically does
bind any other federal departments, agencies Offices), or any state, local or foreign
or offices (including any U.S. Attorney 's , or any and Pfizer attention
other authorities, although the Departmen
t will bring the cooperation ofPfizer gations under this Agreement, to the d to do so by Pfizer or Pfizer HCP.
HCP and its compliance with its other obli
ofsuch agencies and authorities if requeste
l~otice 25. Any notice to the Department under this Agr overnight delivery by a recognized deli eement shall be given by personal delivery,
very service, or registered or certifie
d mail,
addressed to the Deputy Chief — Foreign Criminal Division, U.S. Department of
Corrupt Practices Act Unit, Fraud Sect ion, k Avenue,
Justice, Fourth Floor, 1400 New Yor
N.W., Washington, D.C. 20005. Airy noti ce to Pfizer HCP, shall be given delivery, overnight delivery by a reco
by personal certified
gnized delivery service, or registered or
mail, addressed to Bret A. Campbell, counsel to Pfizer HCP, Cadwal
ader, Wickersham &
Taft LLP, 700 Sixth Street, N.W., Washington, DC 20001. Notice shall be effective upon actual receipt by the Department or Pfizer HCP. Corra~le~e A~reernent 26. This Agreement sets forth all the terms of the agreement between Pfizer HCP and the be valid
Department. No amendments, modifications or additions to this Agree ment sha11 unless they are in writing and signed by the Department, the attorneys and a duly authorized representative ofPfizer HCP.
for Pfizer HCP,
Date: `~1~ ~'~ ~ ~~
JEFFREY B. CHASNOW President
~~ ° '
~s By:~
BRET a. CAMP~~LL PETER B. CLARK Cadwalader, Wickersham & Taft rLP Counsel for Pfizer H.C.P. Corporation
JEFFREY H. KNOX Principal Deputy Chief, Fraud Section (~
Date: ~ ~J ~ u--~
By: A ANIEL B. EDMONDS Assistant Chief, FCPA Unit ANDREW GENTIN Trial Attorney United States Department of Justice Criminal Division 1400 New York Ave., N.W. Washington, D.C. 20005 (202) 307-0629 riatllai~iei.edi~londs(u~~~sdc~i.gov
t ~~ 1 ►'.. '
~~lTtl~l~ ~~1~7~1~i~1Tt7~1°Ili counsel
I have read this Agreement and carefully reviewed every part of it with outside
for Pfizer H.C.P. Corporation "Pfizer HCP"). I understand the terms of this ( Agreement and voluntarily agree, on behalf of Pfizer HCP,to each of its terms. Before signing this Agreement, I consulted outside counsel for Pfizer HCP. Counsel fully advised me of the rights of Pfizer.HCP, of possible defenses, of the Sentencing Guidelines' provisions, and of the consequ entering into this Agreement. I have carefully reviewed the terms of this Agreement with the Board of Directo rs of of ences of
Pfizer HCP. I have advised and caused outside counsel for Pfizer HCP to advise the Board Directors fully of the rights ofPfizer HCP, of possible defenses, of the Sentencing provisions, and of the consequences of entering into the Agreement. No promises or inducements have been made other than those contained in this Agreement. Furthermore, no one has threatened or forced me, or to my knowle dge any authorizing this Agreement on behalf of Pfizer HCP,in any way to enter
into this Agreement. I
am also satisfied with outside counsel's representation in this matter. I certify that I am an officer of Pfizer HCP and that I have been duly authorized by Pfizer HCP to Agreement on behalf ofPfizer HCP. execute this
".~=~,:;~ ~,rF. ~~ „-
~~~~` ,2012
irk ';~y ;~,
f~ ~ ~
I am counsel for Pfizer H.C.P. Corporation "Pfizer HCP")in the (
matter covered by this HCP
Agreement. In connection with such representation, Ihave examin ed relevant Pfizer documents and have discussed the terms of this Agreement with the Pfizer
HCP Board of
Directors. Based on our review of the foregoing materials and discussions, I am of that the representative ofPfizer HCP has been duly authorized to enter
into this Agreement on authorized, executed, ion of Pfizer HCP. of Directors and
behalf of Pfizer HCP and that this Agreement has been duly and validly and delivered on behalf of Pfizer HCP and is a valid and binding obligat
Further, I have carefully reviewed the terms of this Agreement with the Board
the President of Pfizer HCP. I have fully advised them of the rights of Pfizer HCP,of possible defenses, of the Sentencing Guidelines' provisions and of the conseq uences of entering into this ent, based
Agreement. To my knowledge, the decision ofPfizer HCP to enter into this Agreem on the authorization of the Board of Directors, is an infoizned and volunt ~.
ary one.
BRET A. CAMP L PETER B. CLARK Cadwalader, Wickersham &Taft LLP Counsel for Pfizer H.C.P. Corporation
y( `
This statement of facts is incorporated by reference as part of the Deferred Prosecution Agreement (the "DPA"} between the United States Department of Justice, Criminal Division, Fraud Section (the "Department and Pfizer H.C.P. Corporation( ") "PFIZER HCP"), and the parties hereby agree and stipulate that the following information is true and accurat e.
Should the Department initiate the prosecution that is deferred by the DPA with PFIZER HCP, PFIZER HCP agrees that it will neither contest the admissibility of, nor contradict, this Statement of Facts in any such proceeding. ~ACKGRO~D Relevant Entities and Individuals 1. PFIZER HCP was an indirect wholly owned subsidiary of Pfizer Inc. "Pfizer ( ") and was incorporated under the laws of the State of New York. PFIZER HCP was a "domes tic concern" within the meaning of the FCPA, IS U.S.C. § 78dd-2(h}(1). PFIZER HCP's indirect parent company, Pfizer, was a global pharmaceutical, animal health, and consumer product company headquartered in New York, New York, and incorporated in Delaware. It issued and maintained a class of publicly traded securiti es registered pursuant to Section 12(b) of the Securities Exchange Act, and its common stock traded on the New York Stock Exchange under the symbol "PFE." As such, Pfizer was required
to file periodic reports with the United States Securities and Exchange Commis sion (the "Commission") under Section 13 of the Securities Exchange Act. Accordi ngly, Pfizer was an "issuer" within the meaning of the FCPA, 15 U.S.C. § 78dd-1( a). During the relevant period, PFIZER HCP operated in several international market s through
representative offices, including offices in Bulgaria, Croatia, and Kazakhstan, as well as through contracts with Russian distributors and employees of a representative office of PFIZER HCP's parent company in Moscow( "Pfizer Russia"). The books and records of PFIZER HCP, which included revenues from the aforementioned countries, were consolidated into the books and records of Pfizer for the purposes of preparing Pfizer's year-end financial statements, which were filed with the Commission in Washin gton, D.C. 2. On April 16, 2003, Pfizer acquired Pharmacia Corporation( "Pharmacia") in a stock-forstock transaction. Pharmacia's international operations were combined with Pfizer's, including Pharmacia's operations in Bulgaria, Croatia, Kazakhstan and Russia which were thereafter restructured and incorporated into PFIZER HCP. Prior to the 2003 merger, Pharmacia operated in the Republic of Croatia as a representative office of Pharmacia &Upjohn S.p.A., an Italian company, and later as a representative office of Pharmacia Enterprises Luxembourg SARL (collectively "Pharmacia Croatia"). 3. Croatian Official, a citizen of the Republic of Croatia, held official positio ns on government committees in Croatia and had influence over decisions concern ing the registration and reimbursement of Pfizer products marketed and sold in the country. Croatian Official was a "foreign official" as that term is defined in the FCPA, 15 § 78dd-2(h)(2). 4. Kazakh Company was a Kazakh company that contracted with PFIZER HCP to provide distribution services and related services in the Republic of Kazakhstan. In light of the foregoing, Kazakh Company was an "agent of a domestic concern," as that term is defined in the FCPA, 15 U.S.C. § 78dd-2(h)(1). U.S.C.
Russian Official 1, a citizen of the Russian Federation , was a medical doctor, employed by a public hospital, aild had influence over the Russian government's purchase and prescription of Pfizer products marketed and sold in the country. Russian Official 1 was a "foreign official" as that term is defined in the FCPA , 15 U.S.C. ~ 78dd-2(h)(2).
Russian Official2, a citizen of the Russian Federation , was ahigh-ranking government official, who held official positions on government committees in Russia, and had influence over decisions concerning the reimbursement of Pfizer products marketed and defined in
sold in the country. Russian Official 2 was a "foreign official" as that tei7n is the FCPA, 15 U.S.C. § 78dd-2(h)(2). 7.
Russian Official3, acitizen of the Russian Federation , had influence over decisions concerning treatment algorithms that could include Pfizer products marketed and sold in
the country. Russian Official 3 was a "foreign offic ial" as that term is defined in the FCPA, 15 U.S.C. § 78dd-2(h)(2). 8. Russian Company 1 was a Russian company that bid on tenders issued by Russian healthcare institutions and worked with PFIZER HCP and Pfizer Russia to fill tenders using Pfizer products. In light of the foregoing, Russian Company 1 was an "agent of a domestic concern," as that term is defined in the 9. FCPA, 15 U.S.C. § 78dd-2(h)(1).
Russian Company 2 was a Russian company that provi ded certain services to PFIZER HCP and Pfizer Russia, including making improper payments to Russian government officials and other companies on PFIZER HCP's behalf, in order to conceal the payments. In light of the foregoing, Russian Comp any 2 was an "agent of a domestic concei7l," as that term is defined iil the FCPA, 15 U.S.C . § 78dd-2(h)(1).
O~~igii~ ofthe Investigation and Coo~e~~ation with the Autho~~ities 10. In May 2004, Pfizer's Corporate Compliance Division learned of potentially improper payments by the Croatian representative office of PFIZER HCP "Pfizer HCP ( Croatia"). After conducting a preliminary investigation using external counsel, Pfizer made a voluntary disclostue to the Department and to the Commission. At the time, neither agency was aware of the allegations of improper payments or had any open investigation involving the overseas operations ofPfizer or any of its subsidiaries. 11. From 2004 to the present, Pfizer, using external counsel and forensi c accountants, internal Legal, Compliance, and Corporate Audit personnel, conduct ed an extensive, global review of its operations regarding allegations of improper payments to government
officials and government doctors, including in PFIZER HCP markets and those of other Pfizer subsidiaries. This included a review of allegations that were identifi ed by Pfizer's own internal investigations and compliance controls, including its system of proactive FCPA reviews and enhanced audits. Pfizer reported to the Depart ment and the Commission on the results of these investigations on a regular basis. 12. At the request of the Department and the Commission, Pfizer agreed to periodically toll the statute of limitations on its own behalf and on behalf ofits subsidiaries. 13. In addition, starting immediately in 2004, Pfizer launched extensive remedi al actions including: undertaking a comprehensive review of its compliance program, implementing
enhanced anti-corruption compliance policies and procedures on a worldwide basis, developing global systems to support employee compliance with the enhanced procedures, adding FCPA-specific reviews to its internal audits, perform ing proactive anti-corruption compliance reviews in approximately ten markets annually, and
conducting comprehensive anti-coiYUption paining throughout the organization. Pfizer regularly reported to the Department and the Commission on these activities and sought their input concerning the scope and focus of these remedial activities. BackgYOU~~d on hztei~national Pha~~naceutical Sales 14. The manufacture, registration, distribution, sale, and prescription of pharmaceuticals were highly-regulated activities throughout the world. While there were multinational regulatory schemes, it was typical that each country established its own regulatory structure at a local, regional, and/or national level. These regulatory structu res generally required the registration of pharmaceuticals and regulated labeling and adverti sing. Additionally, in certain countries the government established lists of pharmaceutical s that
were approved for government reimbursement or otherwise determi ned those pharmaceuticals that might be purchased by government institutions. Moreover,
countries often regulated the interactions between pharmaceutical companies and hospitals, pharmacies, and healthcare professionals. 15. In those countries with national healthcare systems, hospitals, clinics, and pharmacies were generally agencies or instrumentalities of foreign goveniments, and, thus, many of the healthcare professionals employed by these agencies and instrum entalities were foreign officials within the meaning of the FCPA. 16. During the relevant period, for the purpose of improperly influencing foreign officials in
connection with regulatory and formulary approvals, purchase decisions, prescription decisions, and customs clearance, employees or agents ofPFIZER HCP and Pfizer Russia things of
made and authorized the making of payments of cash and the provision of other
value both directly and through third parties. Funds for these payments were often
generated by the employees or agents of PFIZER HCP and Pfizer Russia through the use of collusive ve,~ldors to create fiaudulent invoices.
r ~j L? 1 t~ g~ # 1 ,~ J~ 7 t= 1 t k ~~ ~, I
.~ t .~,'
The facts identified in the following paragraphs are representati ve of the types of the improper payments made by employees or agents ofPFIZ ER HCP to corrupt government than $7,000,000.
officials. As a result of corrupt payments, PFIZER HCP earne d more ,•
Improper Paymentsfor Ti^avel to In, fZuence the Sales ofPharmaceut 18.
PFIZER HCP's representative office in Bulgaria "Pfizer HCP ( Bulgaria") used improper travel to corruptly influence sales ~f pharmaceutical products.
For example, Pfizer HCP Bulgaria created a program of promo tional meetings known as "Incentive Trips" that were intended to reward Pfizer HCP Bulgar ia sales representatives for achieving their sales goals by permitting the sales repres entatives to invite three or four government doctors as guests. On January 24, 2003, a Pfizer HCP Bulgaria district manager sent an electronic message to four sales representati ves that discussed marketing
programs and "various possibilities to stimulate the prescr ibers." The district manager instructed the sales representatives to "put to each individual doctor a specific target as to
how many packs (or new patients) per month he should achie ve" and then to decide which doctors would be "stimulated" through promotions such as the incentive trips. Pfizer HCP Bulgaria incurred expenses totaling over $28,000 in connection with Incentive Trips to tourist destinations in Greece. 20. Similarly, Pfizer HCP Bulgaria employees offered to provi de support to Bulgarian government doctors to attend medical conferences and other educational events in return
for agreements to prescribe Pfizer pharmaceutical products.
Pfizer HCP Bulgaria
incurred expenses of over $17,000 in connection with these agreements. For example, on October 14, 2003, a Pfizer HCP Bulgaria sales department manager sent an electronic message to multiple sales representatives containing instructions for submitting sponsorship requests and explained how "commitments" to a certain level of prescription must be made before Pfizer HCP Bulgaria would sponsor the doctors , including government doctors. The manager wrote: "[e]ach representative wanting to sponsor someone ...must very precisely state the grounds for recommending the sponsorship, and also what the doctor in question is expected to do or has already done (which is the better option). `Greenfield' investment is not to be preferred, because in many cases promises are not fulfilled... If you are given approval, please state the exact
commitments the doctor has made or performed when filling the form."
ConsultzngAgree~nents Used to SecuJ°e Regulatory Appi °ovals and Increase Phan°maceutical Sales 21. Pharmacia Croatia, and later Pfizer HCP Croatia, used "consulting agreements" to corruptly influence the sales of pharmaceutical products, including the registration of pharmaceutical products or their inclusion on reimbursement lists, by making improper payments to a doctor involved in government committees that regulated pharmaceutical sales in Croatia. 22. For example, on or about February 1, 1997, Pharmacia Croatia execute d a purported "Consulting Agreement" with Croatian Official, who was a prominent Croatian doctor and also a professor of internal medicine at a government funded university. Croatian Official also held official positions on government committees in Croatia , and had
influence over decisions concerning the registration and reimbursemen t of Pfizer products marketed and sold in the country. I~l return for monthly paymen ts, which were paid to an Austrian bank account held in Croatian Official's name, the doctor was obligated to "provide medical and thereto related regulatory consultancy services to Pharmacia &Upjohn, as requested by Pharmacia &Upjohn...." 23. On or about April 10, 1997, the Pharmacia Croatia General Manager explain ed the purpose of the Consulting Agreement: "as [Croatian Official] is a membe r of the Registration Committee regarding pharmaceuticals, I do expect that all products which are to be registered, will pass the regular procedure by his.assistance." 24. From in or around February 1997 to May 2003, Croatian Official submitt ed monthly invoices, which failed to indicate the nature of the services, requesting compen sation for services provided under the Consulting Agreement. 25. During the period in which he received payments from Pharmacia Croatia pursuan t to the
Consulting Agreement, Croatian Official held multiple positions within Croatian government agencies that regulated the pharmaceutical industry. Boring this time period, Croatian Official was a member of committees that determined which pharnaaceutical products could be registered and sold in Croatia, as well as which product s would be reimbursed under the country's national health insurance system and at what price they would be reimbursed. During the period Croatian Official received payments, at least twelve Phanizacia and Pfizer pharmaceutical products were approved for sale by those committees, and at least thirteen Pharmacia and/or Pfizer pharmaceutical products were approved for reimbursement by the national health insurance program. After the
Pharmacia merger in March 2003, Pfizer HCP Croatia continued making payments to
Croatia~l Official for a limited time, during which period Pfizer HCP Croatia believed that three Pfizer products were approved with the assistance of the Bonuses Paid to Increase Pharmaceattical Sales 26. Pharmacia Croatia, and later Pfizer HCP Croatia, made payments described as "hospital bonuses" or "verbal bonuses" to corruptly influence the sales of pharmaceutical products and the inclusion of pharmaceutical products in tenders or on fornnulary 27. lists: doctor.
Pharmacia Croatia entered into oral agreements with government officials at Croatian government hospitals to provide "bonuses" that were calculated as a percentage of the amount of certain Pharmacia pharmaceutical products. In return, the government
officials would agree to direct the purchasing of Phannacia produc ts, and later Pfizer products, by their institutions. Bonuses were provided by Phaxmacia Croatia and Pfizer HCP Croatia in the form of support for international travel, purcha ses of equipm ent, free
pharmaceutical products as well as cash payments, travel expens es for attending medical conferences, and lecture fees. The benefits were provided at times directly for the benefit of the doctor, and at times for the benefit of the hospital. 28. On or about February 18, 2004, a Pfizer HCP Croatia sales represe ntative drafted a memorandum reporting on her discussions with doctors at Croati an public hospitals regarding bonus agreements for purchases of a Pfizer product, which reflected an agreement with the chief doctor who promised purchases of the Pfizer product in exchange for PFIZER HCP providing various things of value, including travel benefits and bonuses based on a percentage of sales.
Dist~~ibution Ag~~eements Used to Secu~°e Regist~^ation. Approval 29. PFIZER HCP's representative office in Kazakhstan "Pfizer HCP Kazakhstan") ( granted a
distributorship to Kazakh Company, a company believed to be affiliated with senior Kazakh govenunent officials, in order to corruptly obtain approval for the registra a Pfizer product in Kazakhstan. 30. On or about May 5, 2000, Pfizer HCP Kazakhstan entered into an exclusive distribution contract for a Pfizer product with Kazakh Company that was valued at a minimum of $500,000 believing that all or part of the value of the contract would be provide d to a high-level Kazakh government official. 31. On or about September 23, 2003, a regional supervisor with responsibility for Pfizer HCP tion of
Kazakhstan sent a memoranda to his supervisor memorializing a convers ation held in Kazakhstan, in which he indicated that the controller of Kazakh Company was "very close to government officials," and that Kazakh Company was likely respons ible for Pfizer HCP Kazakhstan's past problems with the registration of a Pfizer product in Kazakh Stan. FZ/ICSCY/I I1np~~ope~ Pay~zentsfo~~ Ti°avel to Co~^~uptly Influence the Sales ofPhan~rzaceuticals 32. Pfizer Russia intended to use conference attendance and travel as a corrupt inducement for healthcare providers to prescribe or purchase Pfizer products. 33. For example, on or about September 8, 2003, a Pfizer Russia employee emailed colleagues that Russian Official 1 requested funds to attend a confere nce and "has
pledged to prescribe at least 20 packs of[a Pfizer product] per month, and 20 another Pfizer product]." 34.
[] packs [of
Similarly, in an email dated June 27, 2005, a Pfizer Russia employee emaile d that a government doctor "should be assigned ±he task of stretching the amount of the purchases ... to US $100 thousand" as an "obligation" in exchange for a trip to a conference in the Netherlands or Germany.
On or about September 14, 2005, a Pfizer Russia employee emailed that an "agreement on cooperation" had been reached with a govenunent doctor, and that Pfizer Russia's requirements were the "purchase quantities," and the doctor's requirement a conference."
ImpYOper Sales and Marketing Practices The `Hospital Program"
was "a trip to
Pfizer Russia used purported sales initiatives as a corrupt inducement for healthcare providers to prescribe or purchase Pfizer products. Pfizer Russia institu ted a sales initiative referred to as the "Hospital Program" in which Pfizer Russia employees were allowed to provide incentives that were calculated as 5% of the value of certain Pfizer products purchased by the hospitals.
On its face, the Hospital Program appeared to be a mechanism for Pfizer Russia to provide the equivalent of indirect price discounts or in-kind benefit s to govenunent hospitals in connection with their purchases of Pfizer products. Iii practic e, however, Pfizer Russia used the Hospital Program to make cash payments to individual government healthcare professionals to corruptly reward past purchases and prescriptions
of Pfizer products, and to corruptly induce future purchases and prescriptions.
Pfizer l~ussia employees obtained cash for the Hospital Prog
ram incentive payments with
the assistance of collusive vendors. The vendors woul d provide cash to the employees after receiving payment from Pfizer Russia on the basis offalse invoices submitted by the
vendors. Pfizer Russia employees used the cash to make payments to doctors tc~ reward past sales a~ld induce future sales. For example, on or about June 9, 2005, a Pfizer Russi employee sent an email to her supervisor-stating that a a
cash payment had been made to an
individual govenlment doctor, which represented 5% of the value of the purchases of a Pfizer product made by a certain government hospital 39. during March 2005. tly to the doctors, Pfizer Russia
In addition to delivering the incentive cash payments direc
also used intermediary companies to make Hospital Program payments. In some cases the intermediary companies were identified by the recipient doctors and administrators, and in some cases they were selected by Pfizer Russia 40. employees.
Pfizer Russia also used the Hospital Program to make donations of goods or sponsorship aid to government hospitals, but Pfizer Russia did not require an accounting of ~~hether the donations of goods or sponsorship aid were actually or if they were used personally by government offici als. used by the government hospitals
The Finance Director of Pfizer Russia established
two Hospital Program account codes in
the company's General Ledger a11d instructed emplo yees to book to this account all their Hospital Program payments and transactions, inclu ding improper payme around 2003 through in or around 2005,Pfizer Russi nts. From in or
a booked approximately $820,000 in .
transactions to the two Hospital Program account codes
b~7pNOpe~^ Pay»~.e~2tsfor Ti^avel Linked to Fof°mulary Approvals a~~d C-ovenzment RecoJ~a»zendatiol~s 42. Pfizer Russia intended t~ use conference attendance and travel to corruptly influence the inclusion of Pfizer products in tenders or on formulary lists. 43. For example, on or about November 19, 2003, in an invoice cover letter, a Pfizer Russia
employee requested "payment for the (motivational) trip of [Russian Official 2] for the inclusion of[a Pfizer product] into the list ... of medications refundable by the order to influence Russian Official2 to add [the Pfizer product] to the regional lisf. 44. Similarly, on or about December 2, 2004, a Pfizer Russia employee requested sponsorship for a local department of health employee who was assistin g the chief pharmacologist of a regional pediatric hospital, Russian Official 3, who was compiling algorithms for antibiotic therapy and wanted "to be financially compensated" for this work. The Pfizer Russia employee noted that, "in return for this," the pharmac ologist "will include our products in the treatment algorithms." The treatment a1_gorithms by Russian Official 3 constituted the official government-recommended treatment. Imps°opeY Sales and Mai°keti~~g Pf~actices Use oflnter~raediaYy Companies 45. Pfizer Russia also used third party intermediaries to make improper payments related to corruptly increasing the sales of pharmaceuticals. This practice was approv ed by senior leadership in Pfizer Russia, including the Country Manager and the Financ e Director. According to Pfizer Russia employees, it was common in Russia for government officials state" in
to use third party companies to receive the improper payments. As a result, many transactions involved four companies: the company, the government official , and their respective intermediary companies.
Fir example, on or about April 7, 20C4, a Pfizer Russia employee requested that a payment be made to a ~ubli~ official "who took an active part in getting [a Pfizer product] into the bidding." This request was supported by two invoice cover letters identifying "payment for the service of [), an employee of the State Depart ment of [] Healthcare for the purchase of[a Pfizer product)" and a "hospital progra m for purchase of[a Pfizer product]... to civil servant [] of health service." The paymen ts, however, were directed to an intermediary company used by Pfizer Russia to make improper payments to public officials.
Similarly, on or about April 7, 2004, a Pfizer Russia employee requested "honorarium" to a Russian government official "for including [tvvo Pfizer
payment of an
products] in the
list of preferential drugs," on a formulary listing, but directed the paymen t through an intermediary company. The invoice falsely stated that the payment the to intermediary company was for "organization of a conference." 48. On or about July 26, 2004, a Pfizer Russia employee sent an email to his supervisors stating that Russia Company 1 had won a tender that included a Pfizer product , and that Russian Company 1's costs included "10% - Motivation of Officials." 49. In or around October 2005 through on or about December 8, 2005, Pfizer Russia caused payments totaling at least $69,000 to be made to Russian Compa ny 2 with the understanding that the payments would be provided to individual Russian doctors employed in public hospitals, and that the payments represented 5% of the value of the purchases of Pfizer products in the doctors' respective government hospital 50. s.
In or around October 2005, Pfizer Russia employees discussed how a regiona l distributor would identify for Pfizer Russia companies having "neutral names," to which Pfizer
Russia caald make in7proper payments far the benefit of doctor s, a11d which would be booked inaccurately as conference support. 51. In addition, Pfizer Russia made suspicious and impro per payments totaling approximately $700,000 to companies that appeared to be interm ediaries in connection with corrupt transactions relating to: hospital incentive progr ams, travel and pharmaceutical congresses, third party vendors, an honorarium for a formulary committee conference.
member, distributor reimbursement, and expenses for staging a gover nment
3'. ~i,
~~~~I~I~f~~~. ~~ ~~~~~
~~~~~T~~~
WHEREAS,Pfizer H.C.P. Corporation "Pfizer HCP" or the "Com ( engaged in discussions with the United States Department of Justic Section (the "Department regarding issues arising in relation ")
pany has been ")
e, Criminal Division, Freud
to certain improper payments to and that the Company enter
foreig~l officials to assist in obtaining business for the Company;
WHEREAS,in order to resolve such discussions, it is proposed into a certain agreement with the Department; and WHEREAS,the appropriate officer ofPfizer HCP, Jeffrey
B. Chasnow, together with ors ofthe Company of its consequences of
outside counsel for the Company, have advised the Board of Direct
rights, possible defenses, the Sentencing Guidelines' provisicils, and the entering into such agreement with the Department; Therefore, the Boaxd of Directors has RESOLVED that:
The Company (a) acknowledges the filing ofthe two-count charging Pfizer HCP with a conspiracy to violate the Foreign Corru Title 15, United States Code, Sections 78dd-2 and 78m(b)(2)(A),
pt Practices Act "FCPA"), (
and a violation of the anti-
bribery provisions, Title 15 U.S.C. Sections 78dd-2(a) and 78dd2(i)(1);(b) waives indictment on such charges and enters into a deferred prosecution agreement (c) agrees to accept monetary criminal penalties against Pfizer with the Department; and
HCP totaling $15,000,000, and to t to the conduct described in
pay a total of $15,000,000 to the United States Treasury with respec the Information; 2.
The President ofPfizer HCP,Jeffrey B. Chasnow, is hereb
y authorized,
empowered and directed, on behalf of the Company,to execut
e the Deferred Prosecution
Agreement substantially in such fornl as reviewed by this Board of Directo rs at this meeting with such changes as the President ofPfizer HCP, Jeffrey B. Chasnow, may approve ; 3. The President ofPfizer HCP, Jeffrey B. Chasnow, is hereby authori zed, iate and to
empowered and directed to take any and all actions as may Ue necessary or appropr approve the fotzns, terms or provisions of any agreement or other docume
nts as maybe of the foregoing
necessary or appropriate, to caiYy out and effectuate the purpose ar~d intent resolutions; and 4.
All of the actions ofthe President ofPfizer HCP, Jeffrey B. Chasno
which actions would have been authorized by the foregoing resolutions except were taken prior to the adoption of such resolutions, are hereby severally approved, and adopted as actions on behalf of the Company.
ratified, confirmed,
Date: "~.~~
SUSAN GRANT Corporate Secretary Pfizer H.C.P. Corporation
I_a1-111~C~1~►~11 ~7~71'T~l ' ~~ t
In conjunction with the Deferred Prosecutio~l Agreement between the United States Department of Justice, Criminal Division, Fraud Section (the "Department ") and Pfizer H.C.P. Corporation dated ~(the "Pfizer HCP DPA"), Pfizer Inc.( "Pfizer enters into the ")
following agreement with the Department to undertake certain compliance measur es for Pfizer and all of its subsidiaries and operating companies worldwide. Pfizer will maintain or, as necessary, strengthen its compliance, bookke eping, and internal controls standards and procedures, as set forth in Attachments C1 and C.2. In addition, Pfizer will report to the Department the status of Pfizer's remediation and implementation of compliance measures, as set forth in Attachment C.3. If the Department in its sole discretion determines that Pfizer has not fulfilled the commitments outlined in Attachments C.1, C.2 and C.3, any such failure may be considered, in the sole discretion of the Department, to be a breach of the Pfizer HCP DPA, as Paragraph 16(c) of the Pfizer HCP DPA. contemplated in
In order to address any deficiencies in its internal controls, policies, and
regarding compliance with the Foreign Corrupt Practices Act "FCPA ( "), 15 U.S.C. §§ 78dd-1, et seq., and other applicable anti-corruption laws, Pfizer Inc. and its subsidi aries and operating reviews of its
companies (collectively, "Pfizer") agree to continue to conduct appropriate existing internal controls, policies, and procedures. Where necessary and appropriate, Pfizer agrees to adopt new or to internal controls, policies, and procedures in order to ensure that it maintai
modify existing ns: (a) a system of fair and accurate
internal accotulting controls designed to ensure that Pfizer makes and keeps books, records, and accounts; and (b)rigorous anti-corruption compliance procedures -designed to detect and deter violations of the FCPA and other
code, standards, and
applicable antiing
corruption laws. At a minimum,this should include, but not be Limited to, the follow elements:
A clearly articulated corporate policy against violations of the FCPA, including its anti-bribery, books and records, and internal controls provisi applicable counterparts (collectively, the "anti-corruption laws"); 2. Promulgation of compliance standards and procedures designed to reduce ons, and other
the prospect of violations of the anti-corruption laws and Pfizer's compli
ance code. These ees and, where in a foreign s, distributors, partners");
standards and procedures shall apply to all directors, officers, and employ
necessary and appropriate, outside parties while acting on behalf of Pfizer
jurisdiction, including but not limited to, agents, consultants, representative
teaming partners, and joint venture partners (collectively, "agents and busine ss
The assignii~ent ofresponsibility to one or more senior corporate executives of Pfizer for the implementation and oversight of compli ance with policies, standards, and procedures regarding the anti-corruption laws. Such corporate offici als) shall have the authority to report matters directly to Pfizer's Board of Directors ofthe Board of Directors; 4. Mechanisms designed to ensure that the policies, standards, and communicated to all ss partners. These or any appropriate committee
procedures ofPfizer regarding the anti-corruption laws are effectively
directors, officers, employees, and, where appropriate, agents and busine mechanisms shall include: (a) periodic training for all directors, officer where necessary and appropriate, agents and business partners; and (b)
s, and employees, and,
accompanying ary and
certifications by all such directors, officers, and employees, and, where necess appropriate, agents, and business partners, certifying compliance
with the training requirements;
An effective system for reporting suspected crimuial conduct and/or violations ofthe compliance policies, standards, and procedures regard ing laws for directors, officers, employees, and, where necessary and approp business partners; 6. Appropriate disciplinary procedures to address,.among other things, s directors, the anti-con-uption
riate, agents and
violations of the anti-corruption laws and Pfizer's compliance code by Pfizer' officers, and employees; 7.
Appropriate due diligence requirements pertaining to the retention
oversight of agents and business partners; Standard provisions in agreements, contracts, and renewals thereo f with all agents and business partners that are reasonably calculated to preven comtption laws, which may, depending upon the circumstances, t violations of the anti-
include: (a) anti-corruption
representations and undertakings relating to compliance with the
anti-corruption laws;(U)rights
to conduct audits of the books and records of the agent or busine ss partner to ensiue complialice with the foregoing; and (c) rights to terminate an agent or busine ss partner as a result of ally and undertakings related to
breach of anti-con~uption laws, and regulations or representations such matters; and 9.
Periodic testing of the compliance code, standards, and proced ures violations of anti-corruption
designed to evaluate their effectiveness in detecting and reducing laws and Pfizer's compliance code.
C.1-3
ATT'r~CI-~l~~I~1~' C.2
In addition to and building upon the commitments enumerated in Attachment C.1, Inc. and its subsidiaries acid operating companies (collectively, "Pfizer") agree that
they have d Prosecution Section
taken or will undertake the following, at a minimum,for the duration of the Deferre
Agreement between the United States Department of Justice, Criminal Divisio n, Fraud (the "Department and Pfizer H.C.P. Corporation dated ") General Pfizer will: a. ~'
Maintain the appointment of a senior corporate executive with significant experience with compliance with the FCPA,including its anti-bribery, books records, and internal controls provisions, as well as other applicable anticorruption laws and regulations (hereinafter "anti-corruption laws and regulations")to serve as Chief Compliance and Risk Officer. The Chief Compliance and Risk Officer will have reporting obligations directly to the Chief of and
Executive Officer and periodic reporting obligations to the Audit Committee the Board of Directors. b.
Maintain the appointment of heads of compliance with responsibility for each its business units "BU Compliance Leads") who have reporting obligations ( through the Chief Compliance and Risk Officer or General Counsel.
Establish and maintain an "Executive Compliance Committee" to oversee Pfizer's corporate compliance program with respect to both the laws and regulat ions applicable to Pfizer's business and to Pfizer's Code of Conduct and related
policies. The Executive Compliance Committee is chaired by the Chief Executive Officer, and includes appropriate senior leaders, such as the Chief Financial Officer, the General Counsel and senior leaders from compliance, finance, audit, human resources and Pfizer's business units. 2. Pfizer has and will maintain gifts, hospitality, and travel policies and procedures in each jurisdiction that are appropriately designed to prevent violations of the anti-corrupti laws and regulations.,Specifically, Pfizer has implemented and will maintain the following enhanced anti-con-uption policies and procedures: a. A Global Anti-Bribery and Anti-Corruption Corporate Policy and an International Anti-Bribery and Anti-Corruption Procedure (the "FCPA Procedure"), which are supported by implementing standard operating procedures by market, region or function as appropriate; and which provide detailed procedures for employees to on
follow when interacting with foreign government officials and conducting FCPA due diligence on consultants, technical advisors, researchers and grant recipien and, where appropriate, in commercial transactions with "agents and business partners"(as defined in Attachment C.1). The FCPA Procedure establishes procedures and specific limi±s governing the provision by Pfizer's employees of gifts, hospitality, international travel and site visits, meeting support, educational grants, charitable donations, and consulting fees, speaker fees, honoraria, and the like to foreign government officials. All ofthese procedures are in the local language when appropriate. b. A Global Policy on Interactions with Healthcare Professionals which is supported by implementing standard operating procedures by market, region or function appropriate, establishing ethical standards and procedures for Pfizer employe
C.2-2
follow when interacting with physicians, nurses, and other such professionals, including standards related to product samples, conferences, and practice-related items. c. At a minimum, these policies and procedures shall contain
the following not limited to
restrictions regarding foreign government officials, including but public health care providers, administrators, and regulators:
Gifts must be modest in value, appropriate under the circum
stances, and including
given in accordance with anti-comtption laws and regulations, those of the government official's home country; ii. Hospitality shall be limited to reasonably priced meals, accom
modations, gaining
and incidental expenses that are part of product education and programs, professional training, and conferences or busine iii.
ss meetings; ams,
Travel shall be limited to product education and training progr professional training and education, and conferences or busine and
ss meetings;
Gifts, hospitality, and travel shall not include expenses for than the relevant officials, unless different standards are law or regulation. C'omplaint~, I2epoa~ts, and C'o~apliance Issues
required by local
Pfizer has committed and will continue the commitment of resources for the international functions of the Compliance
significantly enhanced Division that have reporting General Counsel,
obligations through the Chief Compliance and Risk Officer or including the following:
C.2 -3
An international investigations group charged with responding to and investigating anti-corruption compliance issues reported on a global basis acid
ensuring that appropriate remedial measures are undertaken after the complet ion of an investigation; b. An anti-corruption program office providing centralized assistance and guidanc e
regarding the implementation, updating and revising of the FCPA Procedu re, the establishment of systems to enhance compliance with the FCPA Procedure, the administration of corporate-level training and annual anti-corruption certifications; and c. A mergers and acquisitions compliance function designed to support early identification of compliance risks associated with complex business transactions and
and to ensure the integration ofPfizer's compliance procedures into newly acquired entities. 4. Pfizer shall maintain its mechanisms for making and handling reports related to potential violations of anti-corruption laws and regulations, and complaints including, when compliance
appropriate, referral for review and response by internal audit, finance, legal,
and other personnel as appropriate, and will ensure that reasonable access is provided to an anonymous, toll-free hotline as well as to an anonymous electronic complai where anonymous reporting is legally permissible. 5. Pfizer, through its Executive Compliance Committee, ~~ill ensure that the and Legal Divisions review and respond to FCPA and corruption issues consistently. Compliance nt form,
C.2 - 4
disk 14ssess~a~erzt~ and ~roactive Reviews 6. Pfizer has conducted and will continue to conduct arisk-based program of amlual
proactive anti-corruption reviews of high-risk markets. These FCPA proacti ve reviews are designed to identify anti-corruption con7pliance issues, examine compli ance es to be
procedures and controls as implemented in the field and identify best practic
implemented in additional markets. On the basis of those assessments, as needed, Pfizer will modify compliance implementation to minimize risks observed through proactive review process. 7. Specifically, Pfizer will identify markets which are at high risk for con-upt ion because of FCPA the FCPA
their business and location, and will select at least five of those markets to receive proactive reviews during that year. High risk markets shall be identified based on Pfizer's risk assessment process in consultation with the Chief Compliance and Officer, taking into account multiple risk factors including, but not limited degree of interaction with foreign government officials; the existence of
to: a high
internal reports indexes;
of potential corruption risk; a high corruption risk based on certain corruption
and financial audit results. Each FCPA proactive review shall include, at a minimum: a. On-site visits by an FCPA review team comprised of qualified personnel Compliance and, when appropriate, Legal Divisions who have receive and anti-corruption training; b. c. Where appropriate, participation in the on-site visits by qualified auditor s; the officials from the
d FCPA
Review of a representative sample, appropriately adjusted for the risks of market, of contracts with and payments to individual foreign government
or health care providers, as well as other high-risk transactions in the market;
C.2 -5
Creation of action plans resulting from issues identified during FCPA proactiv
reviews; these action plans will be shared with appropriate senior management, including when appropriate the Chief Compliance and Risk Officer, and will contain mandatory remedial steps designed to enhance anti-corruption compliance, repair process weaknesses, and deter violations; and e. Where appropriate, feasible, and permissible under local law,review of the books e
and records of a sample of distributors which, in the view of the FCPA proactiv review team, may present corruption risk. 8. Pfizer has implemented and will continue to implement an FCPA trend analysis requires various operational functions to track and review certain categories interactions with foreign government officials and due diligence on agents partners. ~4cquisitions Pfizer has ensured and will continue to ensure that, when practicable and appropri the basis of a FCPA risk assessment, new business entities are only acquire d after of that
ate on
thorough risk-based FCPA and anti-corruption due diligence was conducted
by a suitable
combination of legal, accounting, and compliance personnel. When such anticorruption due diligence is appropriate but not practicable prior to acquisition of a new busines reasons beyond Pfizer's control, or due to any applicable law, rule, or regulati s for
on, Pfizer
has conducted and will conduct anti-corruption due diligence subsequent to the acquisition and report to the Department any corrupt payments or falsified records as required by Attachment C.3. books and
C.2 -6
Pfizer will ensure that Pfizer's policies, standards and proce
dures regarding anticable, but in any event no
con~uption laws and regulations apply as quickly as is practi more than one year post-closing, to newly-acquired busin a.
esses, and will promptly: employees working in
Train directors, officers, and senior managers, and those positions involving activities covered by Pfizer's polic
ies regarding necessary and
anti-corruption and compliance with the FCPA, and, where appropriate, agents and business partners; and b. Include all newly-acquired businesses in Pfizer's regular schedule. I~elatioreshzps with 7'Izird Pa~Pies 11. When appropriate on the basis of a FCPA risk assessment,
anti-corruption auditing
Pfizer will conduct risk-based ltants, representatives,
due diligence of sales intermediaries, including agents, consu
dis~-ibutors, and joint venture partners. Such due diligence will be conducted prior to the retention of any new agent, consultant, representative, distri and.for all such sales intermediaries will be updated no less At a minimum, such due diligence shall include: a. b. A review of the qualifications and business reputation of A rationale for the use of the sales intermediary; and A review of relevant FCPA risk areas. 12. Where due diligence of a sales intermediary raises a serio us red flag, the relevant iance or legal divisions who the sales intermediaries; butor, or joint venture partner
than once every three years.
information shall be reviewed by personnel from the compl have received FCPA and anti-corruption training. 13. Where necessary and appropriate and where permitted by
applicable law, Pfizer has vialations of the FCPA
included and will include standard provisions designed to prevent
C.2 -7
and other applicable anti-corruption laws and regulations in agreements, renewals thereof with.agents and business partners, including: a.
Anti-corruption representations and undertakings relating to compliance anti-corruption laws and regulations;
Rights to conduct audits of the books and records of the agent or busines that are related to their business with Pfizer; and
Rights to terminate the agent or business partner as a result of any breach
of antito
corruption laws and regulations or representations and undertakings related such anti-corruption laws and regulations. T`Yainin~ 14. Pfizer has provided and shall provide: a. Biennial training on anti-corruption laws and regulations to directo
rs, officers, d by
executives, and employees working in positions involving activities covere Pfizer's policies regarding anti-corruption and compliance with the FCPA; b. Enhanced FCPA training for all internal audit, financial, compliance
and legal diligence ed and
personnel involved in FCPA proactive reviews or anti-corruption due
related to the potential acquisition of new businesses, if not already qualifi experienced; and c. When appropriate on the basis of a FCPA risk assessment, provide anti-corruption training to relevant agents and business partners, at every three years. 15. Pfizer has implemented and shall maintain a system of annual certifications managers in each of Pfizer's Business Units, Divisions, and operational market or regional level, or the reasonable equivalent) as appropriate,
FCPA and least once
functions (at the
their standard operating procedures adequately iinplenlent Pfizer's anti-corrupt ion policies, procedures and controls, including training requirements, that they reviewed and followed up on any issues identified in FCPA trend analyses, are not aware of any FCFA or other con-uption issues that have not already to the Compliance Division or the Legal Division. have and that they
C.2 - 9
AT'~AC'~I
l~T' ~'e3
Pfizer Inc. "Pfizer")agrees to periodically, at no more ( than 9-month intervals during the term of the Deferred Prosecution Agreement between Criminal Division, Fraud Section (the "Department ") the United States Department of Justice, and Pfizer H.C.P. Corporation dated the status of Pfizer's remediation
~~- I~(the "Pfizer HCP DPA"), report to the Depa rtment and implementation of compliance measures described
in Attachments C.1 and C.2. r discover credible evidence, not
During the term of the Pfizer HCP DPA,should Pfize already reported to the Department, that questionable
or corrupt payments or questionable or ed, promised, paid, or authorized by
corrupt transfers of property or interests may have been offer any Pfizer entity or person, or any entity or person while related false books and records have been maintained
working directly for Pfizer, or that
, Pfizer shall report such conduct to the be scheduled between Pfizer and the the entry of the Pfizer
Department in the course of periodic communicatio n to
Department. The first such update shall take place within.60 days after HCP DPA. During the term of the Pfizer HCP DPA,Pfizer shall: (1) submit an initial report, and (2) conduct and prepare described below:
conduct an initial review and
two follow-up reviews and reports, as
Pfizer shall submit to the Department a written repor t within 180 calendar days ofthe entry ofthe Pfizer HCP DPA setting forth a complete description of its FCPA and antisals reasonably designed to ing compliance with file FCPA eters of the subsequent reviews
conuption related remediation efforts to date, its propo
improve the policies and procedures ofPfizer for ensur
and -other applicable anti-corruption laws, and the param
C.3 -1
(the "I~iitial Report"). The Initial Report shall be trans mitted to Deputy Unit, Fraud Section, Criminal Division, U.5. Department
Chief — FCPA
of Justice, 1400 New York
Avenue, N.W., Washington, D.C. 20005. Pfizer may extend the time period for issuance ofthe Initial Report with prior written approval of the 2. Department. l Report, incorporating any t, to further monitor and assess
Pfizer shall undertake two follow-up reviews to the Initia
comments provided by the Department on the Initial Repor whether the policies and procedures of Pfizer are reaso
nably designed to detect and
prevent violations ofthe FCPA and other applicable anticorruption laws. The first follow-up review and report shall be completed by no later than 270 days after completed by no later
the Initial Report. The second follow-up review and report shall be than 270 days after the completion of the first follo than two years and seven days after the entry of the
w-up review and report, but not snore Pfizer HCP DPA. Pfizer may extend prior written approval of the
the time period for issuance of the follow-up reports with Department.
C.3 - 2
I11~117[!7 ►Ti~h~1'1[~!!
Pfizer Inc. agrees to fulfill the conunitments outlined in Attachment C.1, C.2 and C.3 of the Deferred ~'rosecution Agreement between the United States Department of Justice, Criminal Division, Fraud Section and Pfizer H.C.P. Corporation dated ~,~(~ ~~
ice President and General Counsel
APPROVED: _ "~ By:~ ; c ~, BRET A. CAMPBEL?~,~ PETER B. CLARK Attorneys for Pfizer Inc. ,~.~ ..~ ~~
C.4 - 1
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