The recent surge in the enforcement of the Foreign Corrupt Practices Act (FCPA) may have an impact on merger and acquisition activity in the pharmaceutical and medical device industries. Pharmawire reports that DOJ and SEC officials have said the pharmaceutical industry will continue to be a focus of FCPA scrutiny in 2009, as it is particularly global in nature.
According to Pharmawire, AstraZeneca, Eli Lilly, Bristol Myers Squibb, GlaxoSmithKline, Johnson & Johnson, St. Jude Medical, and Novo Nordisk, all publicly-traded companies, are among the pharmaceutical and medical device companies that have already filed documents with the SEC showing they have “been asked for information relating to FCPA enforcement.”
Danforth Newcomb, a partner at Sherman & Sterling, stated that
the due diligence that is currently being put into FCPA questions was unheard of just a decade ago. Now, he said, companies are taking a serious look at any potential problems regarding the FCPA before they proceed with an acquisition. ”You don’t want to acquire a company that puts you into the box of an enforcement proceeding, with all of its various consequences,” he said.