California-based SciClone Pharmaceuticals will pay more than $12 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) when international subsidiaries increased sales by making improper payments to health care professionals employed at state health institutions in China.

The company was represented by John Dwyer and Jessica Valenzuela Santamaria of Cooley in Palo Alto, California

An SEC investigation found that employees of SciClone’s subsidiaries acted as agents of the company when they gave money, gifts, and other things of value to the health care professionals, which led to several million dollars in sales of pharmaceutical products to China’s state health institutions.

The schemes, which lasted at least five years, were condoned by various managers within SciClone’s China-based subsidiaries.

The improper inducements were not accurately reflected in the company’s books and records as SciClone failed to devise and maintain a sufficient system of internal accounting controls and lacked an effective anti-corruption compliance program.

The SEC’s order finds that SciClone violated the FCPA’s anti-bribery, internal controls, and books-and-records provisions.

SciClone consented to the order without admitting or denying the findings, and agreed to pay $9.426 million in disgorgement of sales profits plus $900,000 in prejudgment interest and a $2.5 million penalty.

SciClone will give status reports to the SEC for the next three years on its remediation and implementation of anti-corruption compliance measures.