In re Alexion Pharmaceuticals

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 89214 / July 2, 2020 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4151 / July 2, 2020 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19852 
 
 
In the Matter of 
 
Alexion Pharmaceuticals, Inc. 
 
Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Exchange Act”), against Alexion Pharmaceuticals, Inc. 
(“Alexion” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 
 
 
 
 
 
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. These proceedings arise out of Alexion’s violations of the internal accounting 
controls and recordkeeping provisions of the Foreign Corrupt Practices Act of 1977. 
2. From 2010 to 2015, Alexion’s subsidiary in Turkey made payments to foreign 
officials in order to influence them to provide favorable regulatory treatment for Alexion’s 
primary drug, Soliris, and to approve Soliris prescriptions for individual patients.  In addition, 
from 2011 to 2015, Alexion’s subsidiary in Russia made payments to foreign officials in order 
to influence the allocation of regional healthcare budgets for Soliris, increase the number of 
approved Soliris prescriptions, and favorably influence the regulatory treatment of Soliris.  The 
payments were made in a variety of ways, including through the use of a third-party consultant, 
honoraria, and grants.   
3. In connection with these improper payments, false books and records were 
maintained by Alexion’s subsidiaries in Turkey and Russia.  Alexion had insufficient internal 
accounting controls to detect and prevent these payments and to provide reasonable assurances 
that these transactions were recorded accurately in the books and records of these subsidiaries, 
which were consolidated into Alexion’s books and records.  The payments continued through 
2015 due to Alexion’s inadequate internal accounting controls and the lack of an effective anti-
corruption compliance program.  As a result, Alexion was unjustly enriched by over $14 
million. 
4. In addition, Alexion’s inadequate internal accounting controls resulted in the 
failure of Alexion’s subsidiaries in Brazil and Colombia to maintain accurate books and records 
regarding third-party payments. 
Respondent 
5. Alexion is a global biopharmaceutical company that develops and sells drugs for 
patients with life-threatening rare and ultra-rare diseases.  Alexion is incorporated in Delaware 
with its headquarters in Boston, Massachusetts.  Alexion began commercial sales of its first drug, 
Soliris, in 2007.  During the relevant time period, Soliris was approved to treat two ultra-rare 
diseases, paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic 
syndrome (“aHUS”).   
6. Alexion serves patients in approximately 50 countries and employs 
approximately 3,000 people worldwide.   
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 3 
7. Alexion issued and maintains a class of publicly-traded securities registered 
pursuant to Section 12(b) of the Exchange Act, which have traded on the Nasdaq Stock Market 
LLC since 1996.   
Other Relevant Entities 
8. Alexion Ilaç Ticaret Limited Sirketi (“Alexion Turkey”) is a wholly-owned 
Alexion subsidiary incorporated in 2010.  Alexion Turkey’s books and records were consolidated 
into Alexion’s financial statements. 
 
9. Alexion Pharma OOO (“Alexion Russia”) is a wholly-owned Alexion subsidiary 
incorporated in 2012.  Alexion Russia’s books and records were consolidated into Alexion’s 
financial statements. 
 
10. Alexion Pharma Brazil (“Alexion Brazil”) is a wholly-owned Alexion subsidiary 
incorporated in 2009.  Alexion Brazil’s books and records were consolidated into Alexion’s 
financial statements. 
 
11. Alexion Pharma Colombia SAS (“Alexion Colombia”) is a wholly-owned 
Alexion subsidiary incorporated in 2009.  Alexion Colombia’s books and records were 
consolidated into Alexion’s financial statements. 
 
Facts 
Turkey 
12. Alexion began selling Soliris through Turkey’s named patient sales (“NPS”) 
program in 2009.  Under Turkish law, each patient’s application to begin Soliris therapy 
required review and approval by health care providers (“HCPs”) appointed to serve on 
commissions in Turkey’s Ministry of Health, separate approvals to pay for the prescription, and 
recurring approvals to continue the patient on Soliris therapy.  Alexion Turkey paid HCPs 
employed at state-owned healthcare institutions for services, including research and educational 
events. 
13. Alexion initially struggled to get these approvals for Soliris.  In January 2010, a 
senior Ministry of Health official suggested to an Alexion Turkey regional account manager 
that, to obtain more patient approvals, Alexion Turkey may need to make payments to 
government officials.  Thereafter, Alexion Turkey hired a consultant (“Consultant”) to assist 
Alexion Turkey with the patient approval process.  The Consultant was hired in significant part 
due to the Consultant’s connections to top Ministry of Health officials. 
14. From 2010 to 2015, Alexion Turkey paid the Consultant over $1.3 million, 
consisting of consulting fees and purported expense reimbursements.  The Consultant passed a 
portion of these funds on to Turkish government officials, in the form of cash, meals, or gifts, to 
secure favorable treatment for Soliris.  As a result of these payments, Alexion Turkey not only 
secured approvals for patient prescriptions, but also received confidential information and 

 4 
advance feedback from government officials on regulatory submissions.  Alexion Turkey 
recorded these improper payments inaccurately, claiming them as legitimate expenses. 
15. Two Alexion Turkey managers made some of the payments to the Consultant by 
asking a third-party vendor to pay the Consultant and provide falsified invoices for 
reimbursement to Alexion Turkey.  Certain Alexion Turkey employees recorded these payments 
inaccurately in Alexion Turkey’s books and records.  Further, an Alexion Turkey manager 
directed that the description of the Consultant’s claimed expenses should be written in pencil.  
The use of pencil would allow the description of the expenses to be easily changed or 
concealed. 
16. Alexion Turkey failed to require that the Consultant provide sufficient 
documentation of expenses or services provided in return for the payments.  From 2010 to 2015, 
the Consultant provided little or no explanation for many expenses, and failed to provide 
independent documentation for most of the purported expenses.  Expense documentation that 
was submitted often sought reimbursement for large, vague expenses (e.g., categorized only as 
“other expense”).  Even so, expense documentation associated with some of the payments 
indicates that the funds were for the benefit of government officials (e.g., noting first names of 
known government officials on submitted expense reports or notes attached thereto).   
17. In addition to paying government officials through the Consultant, from 2012 to 
2015, Alexion Turkey managers paid over $100,000 to or at the request of HCPs serving on 
Ministry of Health commissions.  These HCPs were responsible for approving or denying 
patient prescriptions for Soliris and had influence over key regulatory matters, such as treatment 
guidelines and reimbursement criteria.  Alexion Turkey paid these HCPs to influence them to 
approve patient prescriptions and support regulatory actions favorable to Soliris.  These 
payments were recorded inaccurately in Alexion Turkey’s books and records as honoraria and 
grants.  
18. For example, from 2012 to 2014, Alexion Turkey paid over $15,000 to or at the 
request of an HCP who Alexion Turkey senior management recognized was “the decision 
maker for the reimbursement criteria[]” for aHUS and the decision-maker for the approval of 
patient prescriptions for Soliris.  Alexion Turkey began paying the HCP once the HCP assumed 
responsibility for approving or denying patient prescriptions.  Alexion Turkey made these 
payments to improperly influence the HCP to make decisions that would favor Alexion, 
including approving patient prescriptions for Soliris.   
19. At the time these payments were made, Alexion Turkey employees had received 
limited training regarding anti-bribery compliance.  Further, despite Alexion’s knowledge of the 
risk of doing business in Turkey, Alexion failed to devise and maintain internal accounting 
controls that were sufficient to provide reasonable assurances that payments to third parties, 
including consultants and HCPs, were supported by adequate documentation and were for 
legitimate purposes.   
20. As a result of the conduct described above in Turkey, Alexion was unjustly 
enriched by over $6.6 million. 

 5 
Russia 
 
21. Alexion began selling Soliris in Russia in 2012.  At that time, Soliris was sold 
through an NPS process and reimbursed through regional healthcare spending, which required the 
various regions in Russia to allocate funds to Soliris from regional healthcare budgets. 
 
22. Alexion Russia paid HCPs employed at state-owned healthcare institutions for 
services, including research, consulting on specific topics, and hosting educational events and 
activities.  Certain state-employed HCPs also served in official roles at the regional and federal 
levels of the Russian government healthcare system.  These HCPs provided expert opinions relied 
upon by decision-makers regarding the allocation of regional healthcare budgets and the 
regulatory treatment of Soliris.  Alexion Russia senior managers believed that these HCPs had 
decision-making authority regarding regional healthcare budgets and regulatory decisions.  From 
2011 to 2015, Alexion Russia made over $1 million in payments to these HCPs, which included 
funds paid to influence the HCPs to take positions favorable to Alexion Russia in connection with 
regional budget allocations, to increase the number of approved Soliris prescriptions, and to 
favorably influence the regulatory treatment of Soliris.  These payments were recorded 
inaccurately in Alexion Russia’s books and records as honoraria, educational expenses, business 
meeting expenses, and scientific research.   
 
23. Some specific examples of Alexion Russia’s improper payments to HCPs in 
Russia are as follows: 
 
a. In 2011 and 2012, certain Alexion Russia managers prioritized 
strengthening Alexion Russia’s relationship with Physician A because Physician A was the chair 
of a committee that made recommendations concerning the allocation of rare disease funds in one 
region of Russia and because Physician A was tasked by the Russian government with proposing 
medical standards used to diagnose and treat PNH.  Alexion Russia made honoraria and research 
payments to Physician A in significant part to influence the regional budget and standards in favor 
of Soliris.  Physician A provided Alexion Russia with a copy of draft diagnostic standards and the 
ability to comment and revise the standards before they were submitted to the Ministry of Health.  
Patients requiring Soliris treatment were allocated 52% of the regional Ministry of Health budget 
in Physician A’s region in 2013.  Physician A received approximately $100,000 from Alexion 
Russia from 2012 to 2015.   
 
b. From 2011 to 2015, Alexion Russia paid over $85,000 to Physicians B and 
C in the form of honoraria, research, and educational expenses, and in the form of a grant to the 
institution that employed Physician C.  Physicians B and C were each geneticists and chief non-
staff specialist advisors to the Ministry of Health.  Physician B was tasked by the Ministry of 
Health with developing and submitting a list of rare diseases to the Ministry of Health, while 
Physician C was tasked with reviewing and advising the Ministry of Health on Alexion Russia’s 
application to include Soliris on a list of drugs used to treat certain diseases.  Internal Alexion 
Russia documents reflect that payments to Physicians B and C were made in significant part to 
improperly influence these Physicians in favor of Soliris.  For example, Alexion Russia began 
paying Physician C and Physician C’s organization after learning that Physician C was tasked 

 6 
with advising the Ministry of Health regarding Soliris.  After making payments to Physician C 
and Physician C’s organization, an Alexion Russia employee recommended providing another 
payment to Physician C’s organization and stated that Alexion Russia hoped to “receive support 
to include [ultra-rare diseases treated by Alexion drugs] in all possible lists,” which would 
facilitate the prescription and reimbursement of Alexion’s products.  After making payments to 
Physician C and his organization, an Alexion Russia employee stated that Physician C 
“cooperated” with Alexion Russia on the “programs within [Physician C’s] influence on regions 
in terms of standards and funding, through [Physician C’s] specialized committee.” 
 
24. Despite Alexion’s knowledge of the risk of doing business in Russia, Alexion 
failed to devise and maintain internal accounting controls that were sufficient to provide 
reasonable assurances that payments to HCPs in Russia were supported by adequate 
documentation and were for legitimate business purposes.   
 
25. As a result of the conduct described above in Russia, Alexion was unjustly 
enriched by over $7.5 million. 
 
Brazil and Colombia 
 
26. From 2013 to 2015, certain employees at Alexion Brazil and Alexion Colombia 
created or directed third parties to create inaccurate financial records concerning payments to third 
parties, including patient advocacy organizations (“PAOs”).   
 
27. For example, in 2013 and 2014, an Alexion Brazil manager caused a PAO to pay 
for the manager’s personal expenses for alcohol and personal travel, and to submit a fictitious 
invoice, which was then reimbursed by Alexion Brazil.  In 2014 and 2015, the same manager and 
an employee in Alexion Brazil submitted grant requests to Alexion’s global grant review 
committee that misstated how the requested funds would be allocated to the different activities 
covered in the grant request.   
 
28. As a further example, on one occasion in 2014, in order to provide funds to a PAO, 
an Alexion Colombia senior manager directed a PAO to submit an invoice that falsely described 
that the funds would be used for “legal support” services.  This inaccurate invoice allowed 
Alexion Colombia to approve the payment locally instead of obtaining approval for the payment 
through the global grant process, as required by Alexion’s policies. 
 
29. Further, Alexion Brazil and Alexion Colombia failed to maintain adequate books 
and records of certain of its financial transactions involving payments to third parties.  Notably, 
both subsidiaries failed to regularly maintain certain documents underlying a substantial number 
of financial transactions.  Additionally, Alexion failed to prevent the destruction of relevant 
documents by certain employees of Alexion Brazil. 
 
 
 
 

 7 
Legal Standards and Violations 
 
30. Under Section 21C(a) of the Exchange Act, the Commission may impose a 
cease-and-desist order upon any person who is violating, has violated, or is about to violate any 
provision of the Exchange Act or any rule or regulation thereunder. 
31. As a result of the conduct described above, Alexion violated Section 13(b)(2)(A) 
of the Exchange Act, which requires issuers to make and keep books, records, and accounts 
which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of the 
assets of the issuer.  As a result of the conduct described above, Alexion violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions 
are recorded as necessary (I) to permit preparation of financial statements in conformity with 
generally accepted accounting principles or any other criteria applicable to such statements, and 
(II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 
with management’s general or specific authorization; and (iv) the recorded accountability for 
assets is compared with the existing assets at reasonable intervals and appropriate action is 
taken with respect to any differences.   
32. As a result of the conduct described above, Alexion violated Section 13(b)(2)(A) 
of the Exchange Act because its books and records did not accurately reflect certain expenses 
and payments, including improper payments to foreign officials and third parties.  Alexion 
violated Section 13(b)(2)(B) of the Exchange Act by failing to devise and maintain sufficient 
internal accounting controls over the payments to foreign officials and third parties. 
Alexion’s Remedial Efforts and Cooperation 
33. In determining to accept the Offer, the Commission considered remedial acts 
undertaken by Alexion and cooperation afforded to the Commission staff.   
34. Alexion’s cooperation included providing regular briefings to Commission staff 
regarding the facts developed in its internal investigation in multiple countries and the forensic 
accounting review that Alexion undertook, and identifying and providing translations of key 
documents.   
35. Alexion’s remediation included strengthening and expanding its global 
compliance organization; enhancing its policies and procedures regarding payments to third 
parties, including the implementation of a centralized system to track and monitor third-party 
payments; revamping its HCP engagement process and oversight; enhancing its internal audit 
function; conducting proactive compliance market reviews; and improving training provided to 
employees regarding anti-corruption.   
 

 8 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Alexion’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Alexion cease and 
desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A) 
and 13(b)(2)(B) of the Exchange Act.   
 
 B. Respondent shall, within 14 days of the entry of this Order, pay disgorgement of 
$14,210,194 and prejudgment interest of $3,766,337 to the Securities and Exchange Commission 
for transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of 
Practice 600.  Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $3,500,000 to the Securities and Exchange Commission for transfer to 
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov through 
the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission 
and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Alexion’s 
name as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Melissa Hodgman, Division of 
Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 20549-5553.  
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

 9 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors 
based on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
                   Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 89214 / July 2, 2020 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4151 / July 2, 2020 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19852 

 

 

In the Matter of 

 

Alexion Pharmaceuticals, Inc. 

 

Respondent. 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

   

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that 

cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 

Securities Exchange Act of 1934 (“Exchange Act”), against Alexion Pharmaceuticals, Inc. 

(“Alexion” or “Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 

 

 

 

 

 

 



 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 
 

1. These proceedings arise out of Alexion’s violations of the internal accounting 

controls and recordkeeping provisions of the Foreign Corrupt Practices Act of 1977. 

2. From 2010 to 2015, Alexion’s subsidiary in Turkey made payments to foreign 

officials in order to influence them to provide favorable regulatory treatment for Alexion’s 

primary drug, Soliris, and to approve Soliris prescriptions for individual patients.  In addition, 

from 2011 to 2015, Alexion’s subsidiary in Russia made payments to foreign officials in order 

to influence the allocation of regional healthcare budgets for Soliris, increase the number of 

approved Soliris prescriptions, and favorably influence the regulatory treatment of Soliris.  The 

payments were made in a variety of ways, including through the use of a third-party consultant, 

honoraria, and grants.   

3. In connection with these improper payments, false books and records were 

maintained by Alexion’s subsidiaries in Turkey and Russia.  Alexion had insufficient internal 

accounting controls to detect and prevent these payments and to provide reasonable assurances 

that these transactions were recorded accurately in the books and records of these subsidiaries, 

which were consolidated into Alexion’s books and records.  The payments continued through 

2015 due to Alexion’s inadequate internal accounting controls and the lack of an effective anti-

corruption compliance program.  As a result, Alexion was unjustly enriched by over $14 

million. 

4. In addition, Alexion’s inadequate internal accounting controls resulted in the 

failure of Alexion’s subsidiaries in Brazil and Colombia to maintain accurate books and records 

regarding third-party payments. 

Respondent 

5. Alexion is a global biopharmaceutical company that develops and sells drugs for 

patients with life-threatening rare and ultra-rare diseases.  Alexion is incorporated in Delaware 

with its headquarters in Boston, Massachusetts.  Alexion began commercial sales of its first drug, 

Soliris, in 2007.  During the relevant time period, Soliris was approved to treat two ultra-rare 

diseases, paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic 

syndrome (“aHUS”).   

6. Alexion serves patients in approximately 50 countries and employs 

approximately 3,000 people worldwide.   

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  



 3 

7. Alexion issued and maintains a class of publicly-traded securities registered 

pursuant to Section 12(b) of the Exchange Act, which have traded on the Nasdaq Stock Market 

LLC since 1996.   

Other Relevant Entities 

8. Alexion Ilaç Ticaret Limited Sirketi (“Alexion Turkey”) is a wholly-owned 

Alexion subsidiary incorporated in 2010.  Alexion Turkey’s books and records were consolidated 

into Alexion’s financial statements. 

 

9. Alexion Pharma OOO (“Alexion Russia”) is a wholly-owned Alexion subsidiary 

incorporated in 2012.  Alexion Russia’s books and records were consolidated into Alexion’s 

financial statements. 

 

10. Alexion Pharma Brazil (“Alexion Brazil”) is a wholly-owned Alexion subsidiary 

incorporated in 2009.  Alexion Brazil’s books and records were consolidated into Alexion’s 

financial statements. 

 

11. Alexion Pharma Colombia SAS (“Alexion Colombia”) is a wholly-owned 

Alexion subsidiary incorporated in 2009.  Alexion Colombia’s books and records were 

consolidated into Alexion’s financial statements. 

 

Facts 

Turkey 

12. Alexion began selling Soliris through Turkey’s named patient sales (“NPS”) 

program in 2009.  Under Turkish law, each patient’s application to begin Soliris therapy 

required review and approval by health care providers (“HCPs”) appointed to serve on 

commissions in Turkey’s Ministry of Health, separate approvals to pay for the prescription, and 

recurring approvals to continue the patient on Soliris therapy.  Alexion Turkey paid HCPs 

employed at state-owned healthcare institutions for services, including research and educational 

events. 

13. Alexion initially struggled to get these approvals for Soliris.  In January 2010, a 

senior Ministry of Health official suggested to an Alexion Turkey regional account manager 

that, to obtain more patient approvals, Alexion Turkey may need to make payments to 

government officials.  Thereafter, Alexion Turkey hired a consultant (“Consultant”) to assist 

Alexion Turkey with the patient approval process.  The Consultant was hired in significant part 

due to the Consultant’s connections to top Ministry of Health officials. 

14. From 2010 to 2015, Alexion Turkey paid the Consultant over $1.3 million, 

consisting of consulting fees and purported expense reimbursements.  The Consultant passed a 

portion of these funds on to Turkish government officials, in the form of cash, meals, or gifts, to 

secure favorable treatment for Soliris.  As a result of these payments, Alexion Turkey not only 

secured approvals for patient prescriptions, but also received confidential information and 



 4 

advance feedback from government officials on regulatory submissions.  Alexion Turkey 

recorded these improper payments inaccurately, claiming them as legitimate expenses. 

15. Two Alexion Turkey managers made some of the payments to the Consultant by 

asking a third-party vendor to pay the Consultant and provide falsified invoices for 

reimbursement to Alexion Turkey.  Certain Alexion Turkey employees recorded these payments 

inaccurately in Alexion Turkey’s books and records.  Further, an Alexion Turkey manager 

directed that the description of the Consultant’s claimed expenses should be written in pencil.  

The use of pencil would allow the description of the expenses to be easily changed or 

concealed. 

16. Alexion Turkey failed to require that the Consultant provide sufficient 

documentation of expenses or services provided in return for the payments.  From 2010 to 2015, 

the Consultant provided little or no explanation for many expenses, and failed to provide 

independent documentation for most of the purported expenses.  Expense documentation that 

was submitted often sought reimbursement for large, vague expenses (e.g., categorized only as 

“other expense”).  Even so, expense documentation associated with some of the payments 

indicates that the funds were for the benefit of government officials (e.g., noting first names of 

known government officials on submitted expense reports or notes attached thereto).   

17. In addition to paying government officials through the Consultant, from 2012 to 

2015, Alexion Turkey managers paid over $100,000 to or at the request of HCPs serving on 

Ministry of Health commissions.  These HCPs were responsible for approving or denying 

patient prescriptions for Soliris and had influence over key regulatory matters, such as treatment 

guidelines and reimbursement criteria.  Alexion Turkey paid these HCPs to influence them to 

approve patient prescriptions and support regulatory actions favorable to Soliris.  These 

payments were recorded inaccurately in Alexion Turkey’s books and records as honoraria and 

grants.  

18. For example, from 2012 to 2014, Alexion Turkey paid over $15,000 to or at the 

request of an HCP who Alexion Turkey senior management recognized was “the decision 

maker for the reimbursement criteria[]” for aHUS and the decision-maker for the approval of 

patient prescriptions for Soliris.  Alexion Turkey began paying the HCP once the HCP assumed 

responsibility for approving or denying patient prescriptions.  Alexion Turkey made these 

payments to improperly influence the HCP to make decisions that would favor Alexion, 

including approving patient prescriptions for Soliris.   

19. At the time these payments were made, Alexion Turkey employees had received 

limited training regarding anti-bribery compliance.  Further, despite Alexion’s knowledge of the 

risk of doing business in Turkey, Alexion failed to devise and maintain internal accounting 

controls that were sufficient to provide reasonable assurances that payments to third parties, 

including consultants and HCPs, were supported by adequate documentation and were for 

legitimate purposes.   

20. As a result of the conduct described above in Turkey, Alexion was unjustly 

enriched by over $6.6 million. 



 5 

Russia 

 

21. Alexion began selling Soliris in Russia in 2012.  At that time, Soliris was sold 

through an NPS process and reimbursed through regional healthcare spending, which required the 

various regions in Russia to allocate funds to Soliris from regional healthcare budgets. 

 

22. Alexion Russia paid HCPs employed at state-owned healthcare institutions for 

services, including research, consulting on specific topics, and hosting educational events and 

activities.  Certain state-employed HCPs also served in official roles at the regional and federal 

levels of the Russian government healthcare system.  These HCPs provided expert opinions relied 

upon by decision-makers regarding the allocation of regional healthcare budgets and the 

regulatory treatment of Soliris.  Alexion Russia senior managers believed that these HCPs had 

decision-making authority regarding regional healthcare budgets and regulatory decisions.  From 

2011 to 2015, Alexion Russia made over $1 million in payments to these HCPs, which included 

funds paid to influence the HCPs to take positions favorable to Alexion Russia in connection with 

regional budget allocations, to increase the number of approved Soliris prescriptions, and to 

favorably influence the regulatory treatment of Soliris.  These payments were recorded 

inaccurately in Alexion Russia’s books and records as honoraria, educational expenses, business 

meeting expenses, and scientific research.   

 

23. Some specific examples of Alexion Russia’s improper payments to HCPs in 

Russia are as follows: 

 

a. In 2011 and 2012, certain Alexion Russia managers prioritized 

strengthening Alexion Russia’s relationship with Physician A because Physician A was the chair 

of a committee that made recommendations concerning the allocation of rare disease funds in one 

region of Russia and because Physician A was tasked by the Russian government with proposing 

medical standards used to diagnose and treat PNH.  Alexion Russia made honoraria and research 

payments to Physician A in significant part to influence the regional budget and standards in favor 

of Soliris.  Physician A provided Alexion Russia with a copy of draft diagnostic standards and the 

ability to comment and revise the standards before they were submitted to the Ministry of Health.  

Patients requiring Soliris treatment were allocated 52% of the regional Ministry of Health budget 

in Physician A’s region in 2013.  Physician A received approximately $100,000 from Alexion 

Russia from 2012 to 2015.   

 

b. From 2011 to 2015, Alexion Russia paid over $85,000 to Physicians B and 

C in the form of honoraria, research, and educational expenses, and in the form of a grant to the 

institution that employed Physician C.  Physicians B and C were each geneticists and chief non-

staff specialist advisors to the Ministry of Health.  Physician B was tasked by the Ministry of 

Health with developing and submitting a list of rare diseases to the Ministry of Health, while 

Physician C was tasked with reviewing and advising the Ministry of Health on Alexion Russia’s 

application to include Soliris on a list of drugs used to treat certain diseases.  Internal Alexion 

Russia documents reflect that payments to Physicians B and C were made in significant part to 

improperly influence these Physicians in favor of Soliris.  For example, Alexion Russia began 

paying Physician C and Physician C’s organization after learning that Physician C was tasked 



 6 

with advising the Ministry of Health regarding Soliris.  After making payments to Physician C 

and Physician C’s organization, an Alexion Russia employee recommended providing another 

payment to Physician C’s organization and stated that Alexion Russia hoped to “receive support 

to include [ultra-rare diseases treated by Alexion drugs] in all possible lists,” which would 

facilitate the prescription and reimbursement of Alexion’s products.  After making payments to 

Physician C and his organization, an Alexion Russia employee stated that Physician C 

“cooperated” with Alexion Russia on the “programs within [Physician C’s] influence on regions 

in terms of standards and funding, through [Physician C’s] specialized committee.” 

 

24. Despite Alexion’s knowledge of the risk of doing business in Russia, Alexion 

failed to devise and maintain internal accounting controls that were sufficient to provide 

reasonable assurances that payments to HCPs in Russia were supported by adequate 

documentation and were for legitimate business purposes.   

 

25. As a result of the conduct described above in Russia, Alexion was unjustly 

enriched by over $7.5 million. 

 

Brazil and Colombia 

 

26. From 2013 to 2015, certain employees at Alexion Brazil and Alexion Colombia 

created or directed third parties to create inaccurate financial records concerning payments to third 

parties, including patient advocacy organizations (“PAOs”).   

 

27. For example, in 2013 and 2014, an Alexion Brazil manager caused a PAO to pay 

for the manager’s personal expenses for alcohol and personal travel, and to submit a fictitious 

invoice, which was then reimbursed by Alexion Brazil.  In 2014 and 2015, the same manager and 

an employee in Alexion Brazil submitted grant requests to Alexion’s global grant review 

committee that misstated how the requested funds would be allocated to the different activities 

covered in the grant request.   

 

28. As a further example, on one occasion in 2014, in order to provide funds to a PAO, 

an Alexion Colombia senior manager directed a PAO to submit an invoice that falsely described 

that the funds would be used for “legal support” services.  This inaccurate invoice allowed 

Alexion Colombia to approve the payment locally instead of obtaining approval for the payment 

through the global grant process, as required by Alexion’s policies. 

 

29. Further, Alexion Brazil and Alexion Colombia failed to maintain adequate books 

and records of certain of its financial transactions involving payments to third parties.  Notably, 

both subsidiaries failed to regularly maintain certain documents underlying a substantial number 

of financial transactions.  Additionally, Alexion failed to prevent the destruction of relevant 

documents by certain employees of Alexion Brazil. 

 

 

 

 



 7 

Legal Standards and Violations 

 

30. Under Section 21C(a) of the Exchange Act, the Commission may impose a 

cease-and-desist order upon any person who is violating, has violated, or is about to violate any 

provision of the Exchange Act or any rule or regulation thereunder. 

31. As a result of the conduct described above, Alexion violated Section 13(b)(2)(A) 

of the Exchange Act, which requires issuers to make and keep books, records, and accounts 

which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of the 

assets of the issuer.  As a result of the conduct described above, Alexion violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 

internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions 

are recorded as necessary (I) to permit preparation of financial statements in conformity with 

generally accepted accounting principles or any other criteria applicable to such statements, and 

(II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 

with management’s general or specific authorization; and (iv) the recorded accountability for 

assets is compared with the existing assets at reasonable intervals and appropriate action is 

taken with respect to any differences.   

32. As a result of the conduct described above, Alexion violated Section 13(b)(2)(A) 

of the Exchange Act because its books and records did not accurately reflect certain expenses 

and payments, including improper payments to foreign officials and third parties.  Alexion 

violated Section 13(b)(2)(B) of the Exchange Act by failing to devise and maintain sufficient 

internal accounting controls over the payments to foreign officials and third parties. 

Alexion’s Remedial Efforts and Cooperation 

33. In determining to accept the Offer, the Commission considered remedial acts 

undertaken by Alexion and cooperation afforded to the Commission staff.   

34. Alexion’s cooperation included providing regular briefings to Commission staff 

regarding the facts developed in its internal investigation in multiple countries and the forensic 

accounting review that Alexion undertook, and identifying and providing translations of key 

documents.   

35. Alexion’s remediation included strengthening and expanding its global 

compliance organization; enhancing its policies and procedures regarding payments to third 

parties, including the implementation of a centralized system to track and monitor third-party 

payments; revamping its HCP engagement process and oversight; enhancing its internal audit 

function; conducting proactive compliance market reviews; and improving training provided to 

employees regarding anti-corruption.   

 



 8 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Alexion’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Alexion cease and 

desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A) 

and 13(b)(2)(B) of the Exchange Act.   

 

 B. Respondent shall, within 14 days of the entry of this Order, pay disgorgement of 

$14,210,194 and prejudgment interest of $3,766,337 to the Securities and Exchange Commission 

for transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of 

Practice 600.  Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $3,500,000 to the Securities and Exchange Commission for transfer to 

the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov through 

the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission 

and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying Alexion’s 

name as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to Melissa Hodgman, Division of 

Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 20549-5553.  

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

http://www.sec.gov/about/offices/ofm.htm


 9 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors 

based on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

                   Secretary