With U.S.-based biotech companies often increasingly turning to overseas markets, Matt Reinhard discusses how an understanding of the Foreign Corrupt Practices Act (FCPA) is more important than ever. According to Reinhard, it's not just big companies that need to pay attention. DOJ's more aggressive stance means that companies taking their first step into foreign markets need to be prepared to comply with the FCPA, he says.
While there's often a resistance to the cost of compliance programs in small and mid-size companies, says Reinhard, businesses making the move into foreign markets need to ensure that they have robust programs in place, including appropriate due diligence controls to ensure that third party contractors do not make illegal payments, undergo training about the requirements of the law, and are monitored on a regular basis. "The government doesn't expect a biotech startup in New Jersey to take the same steps as a $3 billion Pfizer venture in China," Reinhard says, "but it does expect that if you're a big enough boy to play in the international marketplace, you're big enough to put size- and risk-appropriate compliance programs in place."