On December 20, 2012, the Securities and Exchange Commission (SEC) filed a complaint in U.S. District Court charging Eli Lilly with violating the Foreign Corrupt Practices Act (FCPA).

The SEC alleged that between 1994 and 2009, Eli Lilly and Company made improper payments to government officials in Brazil, China, Russia and Poland to secure business in those countries.[i]


The SEC complaint says Eli Lilly “paid bribes to government health officials in a Brazilian state in order to assure sales of a Lilly product to state government institutions.”[ii]


The complaint says that in Poland Eli Lilly made payments to a small charitable foundation dedicated to the “restor[ation of] the Chudow Castle in the town of Chudow and other historic sites in the Silesian region of Poland”;[iii] this foundation “was founded and administered by the head of one of the regional government health authorities at the same time that the subsidiary was seeking the official’s support for placing Lilly drugs on the government reimbursement list.”[iv]


The SEC complaint says that in China, Eli Lilly’s sales representatives and sales managers submitted false expense reports in order “to purchase gifts, such as wine, specialty foods and a jade bracelet, for government-employed physicians,” “to provide meals, visits to bath houses, and card games to government-employed physicians,” “to provide government-employed physicians with visits to bath houses and karaoke bars,” “to buy meals and cosmetics for government-employed physicians,” “to provide gifts and entertainment to government officials [including] spa treatments, meals, and cigarettes.”[v]


The SEC complaint further alleges that Eli Lilly’s subsidiary in Russia “paid millions of dollars to off-shore entities for alleged ‘services’ […] in order to induce pharmaceutical distributors and government entities to purchase Lilly’s drugs.

In some instances, the off-shore entities appear to have been used to funnel money to government officials or others with influence in the government in order to obtain business for the subsidiary.”[vi]

In a press release the day it filed the complaint in U.S. District Court, the SEC said these payments included

“…approximately $2 million to an offshore entity owned by a government official and approximately $5.2 million to offshore entities owned by a person closely associated with an important member of Russia’s parliament.”[vii]


Eli Lilly agreed to pay $29.4 million to settle the charges, without admitting or denying any wrongdoing.[viii]

[i] U.S. Securities & Exchange Commission v. Eli Lilly & Co., Case No. 1:12-cv-02045, Dkt. 1 (D.D.C.  December 20, 2012), available at https://www.sec.gov/litigation/complaints/2012/comp-pr2012-273.pdf.
[ii] Id. p. 1.
[iii] Id. p. 3.
[iv] Id. p. 1-2.
[v] Id. p. 7-8.
[vi] Id. p. 2.
[vii] Press Release, “SEC Charges Eli Lilly and Company with FCPA Violations,” Securities and Exchange Commission, December 20, 2012, https://www.sec.gov/news/press-release/2012-2012-273htm.
[viii] Ibid.