Boston Scientific (NYSE:BSX) is investigating claims that the company violated the U.S. Foreign Corrupt Practices Act in Vietnam.
Marlborough, Massachusetts–based Boston Scientific disclosed receipt of a whistleblower’s allegations in its latest filing with the Securities and Exchange Commission.
“In March 2022, the company received a whistleblower letter alleging Foreign Corrupt Practices Act violations in Vietnam. The company is cooperating with government agencies while investigating these allegations,” the company said in its second-quarter 10-Q filing, dated Aug. 4.
More information about the allegations was not available from the filing or a Boston Scientific spokesperson reached by Medical Design & Outsourcing today. The news was first reported by the Wall Street Journal.
The Foreign Corrupt Practices Act (FCPA) was enacted in 1977 to stop companies and their employees or agents from bribing foreign officials to win or keep business, and requires companies to maintain records and internal controls.
The law is jointly enforced by the Department of Justice and the SEC, both of which have specialized units for FCPA enforcement. The SEC brings civil enforcement actions against companies and individuals for violations, resulting in disgorgements of ill-gotten gains, civil penalties and independent oversight.
For example, in 2022 Stericycle agreed to pay more than $84 million to settle civil and criminal charges for bribery schemes in Argentina, Brazil and Mexico. The Bannockburn, Illinois-based medical waste company’s settlement included about $28 million in disgorgement. Stericycle also agreed to retain an independent corporate monitor for two years and to self-report for another year.
For Boston Scientific, Vietnam is among the company’s emerging markets, which it defines as the “20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities,” the company said in the quarterly results and business overview section of the SEC filing.
“As part of our strategic imperative to drive global expansion, we are seeking to grow net sales and market share by expanding our global presence, including in emerging markets,” the company said in the filing.
Net sales from emerging markets represented 13% of Boston Scientific’s consolidated net sales in the second quarter (ended June 30, 2022) and the first half of 2022, up from 12% in the prior-year periods. Emerging market net sales grew nearly 19% year-over-year in the second quarter “driven primarily by growth in India and Brazil as we continue to focus on globalization of our products,” the company said.
Boston Scientific’s list of worldwide locations only includes Vietnam among its nine Institute for Advancing Science sites, which “offer healthcare professionals hands-on, multidisciplinary training programs for our products and procedures.”
The Asia Pacific region is led by Boston Scientific EVP Art Butcher, who has been in the role since February 2020. He was previously SVP and president of endoscopy.
Boston Scientific is the world’s 14th-largest medical device manufacturer, with more than $9.9 billion in annual revenue and 38,000 employees according to the latest Medtech Big 100 rankings.
