PharmExec Blog

Delay to Bribery Act: Breathing Space for UK Pharma?

Pharma companies anxious about the implications of the imminent UK Bribery Act — which is set to take a hard line on corruption that some might regard as draconian — may be relieved to hear that it has been delayed again. Earlier this month the UK Ministry of Justice announced that its implementation, which was set for April, is being put back three more months to allow further guidance to be published and distributed to UK-based businesses. (The Act has already been a long time coming; it received Royal Assent back in April 2010.)

The Bribery Act is to introduce four offences (two of which are new to the statute books): making a bribe, accepting a bribe, bribing a foreign public official and — of particular interest to pharma — failing to prevent bribery at a corporate level. Writing on Pharmaphorum [September 20, 2010], Steve Gray was concerned that the implications encompass “not just employees, but any agents carrying out an activity to win or retain business for a company.” Or, as his colleague Paul Tunnah put it, “senior executives are being asked to take greater responsibility for what actually happens on the front-line of the business.”

Late last year, while emphasizing its “strong support” for a new anti-bribery law, GSK voiced concerns about the proposed changes to current legislation with regard to the bribing of foreign officials. The changes omit tests of “corruption, dishonesty or impropriety” that are used in existing UK legislation, Simon Bicknell, Corporate Compliance Officer for GSK, pointed out.

“The unintended consequence,” he said, “is to potentially criminalise perfectly legitimate and proportionate promotional expenditure and hospitality, practices which are regulated in many cases already by law.” He added that, in dealings with countries such as China particularly, the new legislation could impede the “vital interaction between the industry and government-employed healthcare professionals and have far-reaching ramifications.”

David O’Hanlon, Associate for law firm Thomas Eggar LLP, therefore thinks that the latest delay “may prove helpful to a number of pharma companies who are not yet aware of the potential implications of the Bribery Act and the ramifications for their business.” He said: “The tension between the government’s stated aims of preventing corruption whilst not penalizing modern business practices such as legitimate corporate hospitality creates a significant ‘grey area’ which the [upcoming] guidance is presumably seeking to clarify.”

A recent survey of Thomas Eggar clients and contacts revealed that although 83 per cent of respondents were aware that the Bribery Act is coming into force, 85 per cent of respondents had either no knowledge or only partial knowledge of the contents of the Act and of what constituted an offence.

O’ Hanlon adds: “[P]harma companies would be well advised to use this hiatus to review the Act and consider the implications and risks to their operations if they have not already done so.”

This entry was posted in Emerging Markets, Europe, Global, Regulatory. Bookmark the permalink. Trackbacks are closed, but you can post a comment.

One Comment

  1. Posted August 8, 2011 at 5:06 am | Permalink

    This is an intriguing piece!

    Thanks for sharing!

    It’s very interesting!

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