Pfizer Inc. is fighting a lawsuit by a former employee who alleges he was fired after he raised concerns about the company paying tens of millions of dollars to government officials in China, where the drugmaker’s business practices have been under US review.
(Bloomberg) — Pfizer Inc. is fighting a lawsuit by a former employee who alleges he was fired after he raised concerns about the company paying tens of millions of dollars to government officials in China, where the drugmaker’s business practices have been under US review.
A federal court in California, where the case was moved from state court earlier this month, is scheduled to hear the New York-based drugmaker’s arguments to dismiss much of the lawsuit in December. The former compliance officer has been in touch with the Securities and Exchange Commission and Justice Department about his findings, according to his lawyer.
In 2020, the SEC’s and DOJ’s Foreign Corrupt Practices Act units sent a request to Pfizer seeking documents related to its operations in China. The act prohibits payments or gifts to officials for the purpose of gaining a business advantage.
“The claims of retaliation are entirely unfounded, and we intend to defend against them,” the company said in an emailed statement. “Pfizer takes compliance concerns very seriously. The company has numerous controls and oversight mechanisms in place to ensure compliance with all applicable regulations and laws in every country in which we operate.”
Pfizer asked for a hearing on Dec. 14 when it says it will request that the judge throw out most of the suit. The plaintiff, Frank Han, failed to allege conduct that violates California law, according to Pfizer.
Han said in the lawsuit that in 2021, when he was director of global compliance analytics at Pfizer, he developed an algorithm to analyze the company’s external funding in order to detect potential fraud. It found that Pfizer paid $168 million in China to potentially influential government officials, with $138 million of that going to corporate sponsorships in the two-year period ending in 2021. In contrast, similarly placed US officials received $11 million, with $2 million paid in sponsorships during the same period, according to the suit.
After he raised these concerns to managers he received poor performance reviews and was subsequently fired, Han said. The complaint, first filed in April, alleges that Pfizer broke California’s labor code prohibiting retaliation against protected whistleblower activity and is asking for unspecified monetary damages and reinstatement of his job.
Han reported his findings to the SEC in 2022, according to the suit. Since then the agency has interviewed him in detail, Stuart Meissner, his lawyer on SEC matters, said in an interview. The DOJ has also been in contact with Han, Meissner said. His client wasn’t aware of the SEC and DOJ inquiries from 2020 when he took his report to the government, he said.
The two agencies declined to comment on the case and on Meissner’s assertions.
China’s government has also increased scrutiny of health-care companies. An anti-corruption campaign aims to weed out wrongdoing in everything from drug companies and manufacturing to hospitals and the state medical insurance fund, an unidentified official from the National Health Commission said in an interview published last week by the official Xinhua News Agency. The campaign is targeting illegal sales activities by drug and medical-device makers, among other activities, the official said.
The case is Han v. Pfizer, 4:23-cv-03908-DMR, US District Court, Northern District of California (San Francisco).
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