BRASILIA, Brazil – Alexion Pharmaceuticals Inc.’s Sao Paulo offices were raided by Brazilian authorities Monday as part of an investigation into the drugmaker’s sales practices, according to an emailed statement from the country’s national police.
Brazil’s police are investigating whether Alexion, with help from a local patient association, subsidized lawsuits for patients to get access to the company’s drug through the country’s national health system, according to request for a search warrant reviewed by Bloomberg. Law enforcement officials have found evidence that some of the lawsuits were fraudulent, according to the search warrant request, and used alleged fake diagnoses and a partnership between Alexion and the association to attract potential patients.
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“We’re aware that authorities were at the Alexion office in Brazil. They have since left, and we’re fully cooperating with the authorities,” Alexion spokeswoman Kim Diamond said by phone. Diamond said she didn’t have any further immediate comment on the details of the investigation.
The company’s shares fell as much as 4.8 percent and had fallen 4.1 percent to $123.51 at 11:39 a.m. in New York.
More than 900 lawsuits were filed by lawyers from the patient association in the last six years. Patient lawsuits helped Alexion bring in 1.29 billion reais ($400 million) from the Brazilian government in the last six years, according to the search warrant request.
Police also searched a local patient association, the Associacao dos Familiares, Amigos e Portadores de Doenças Graves, or AFAG, to which Alexion has said it’s given financial support. The patient group’s president, Maria Cecilia Oliveira, confirmed the search, and said in a telephone interview that the group is cooperating and has done nothing wrong. AFAG is based in Campinas, Brazil, about 60 miles northwest of Sao Paulo.
Alexion is under investigation by the U.S. Securities and Exchange Commission and Department of Justice for issues related to the Foreign Corrupt Practices Act in countries including Brazil, according to company filings.
