Piero Magri
BSVA, Milan
p.magri@bsva.it

Alice Lambicchi
BSVA, Milan
a.lambicchi@bsva.it

The fight against corruption in the healthcare sector in Italy is exploring new and interesting paths. Many pharmaceutical and medical device companies have been indicted in recent years for using corrupt practices to ensure the utilisation of their pharmaceutical or medical products in hospitals. In particular, the crime of bribery involves an agreement between a public official and a private entity, by which the former accepts from the latter, for an act relating to his duties, a utility that is not due to him. The corrupt official can receive money, favours or other utilities. In the case of healthcare companies, the utility received could also be sponsorship of conference events.

Some companies have decided to settle with the authorities, but, for those who faced criminal trials, the verdicts significantly diverged from one another, with a number of verdicts overruled by the Court of Appeals (this has happened not just in the healthcare sector but also in the oil and gas sector).

Nevertheless, it is still possible to trace some interpretative guidelines which may help companies avoid criminal liability, considering that it is sometimes quite challenging to discern whether a company is engaging in corrupt offers or mere gifts.

First, it is vital to assess which interests, risks and gains come into play when a doctor engages in an agreement with a pharmaceutical company. The gap between the monetary gain obtained by the corrupted doctor or hospital and the benefits thereof may suggest that no relevant criminal behaviour has taken place. On the other hand, if cash payments are used in trading relationships, many courts are prone to considering those as criminally relevant behaviour preceding the commission of a bribe.

Second, courts, especially the Court of Appeals, often focus upon the existence of a relevant causal nexus and functional relationship between the service provided by the corrupter and the specific administrative act resulting thereof, that is, the introduction of the medical devices in the medical facility. More precisely, it is strictly required to prove ‘beyond any reasonable doubt’ the existence of a hidden corrupt pact between the company and the public official, and that it was specifically the undutiful behaviour of the public official to have caused the monetary transaction on the part of the company.

However, it is important to note that most criminal investigations for bribes of this sort originate from anonymous letters and go forward through the subsequent acquisition of documents and wiretaps. This was the case up to the introduction of the Italian legislation on whistleblowing in 2023 – Legislative Decree 24/2023 – which is a legislative tool helping the creation of more specific reports regarding bribes in this field too.

Following the strong enforcement of the Legislative Decree 231/01 regarding corporate criminal liability, many trials against healthcare sector companies have happened. In most cases, the parameter grounding the company’s liability is the company’s failure in the implementation of a legality plan and of an efficient control apparatus to prevent and neutralise criminal conduct. However, the criteria – and the evidentiary rigor – excluding the liability of legal persons may change depending on whether the offence is committed by an apical subject or a subordinate: in the former case, there’s a legal presumption of guilt of the company.

In a recent case, the Criminal Court of Milan (the ‘Court’) (Trib. Milano sez X sent. N. 3314/23) delivered a verdict of conviction against an important multinational company, which was sanctioned with a fine of €200,000 and a confiscation order of almost €150,000. The decision, which was subsequently appealed, analysed the company's compliance structure, its internal monitoring systems and the relationships between the internal audit and the national supervisory body – hereinafter the ODV (Organismo di Vigilanza). In particular, the Court underlined how Italy’s internal monitoring system is not always carried out by independent structures, that there is inadequate management of the informative flows on the part of the ODV and the significant deficiency of reports alerting on certain unusual business transactions which were subsequently proven to have taken place.

The Criminal Court of Milan highlighted a series of procedural violations committed by the company: in particular, the Court focused on those regarding the selection of the company's supplier, given the existence of many consulting contracts which the ODV never examined.

According to the Criminal Court of Milan, the preliminary investigation debate revealed the failure of the company to give prompt communications to the ODV about internal anomalies and criticisms, thus preventing the ODV from exercising its usual inspection authority. On top of that, the Criminal Court of Milan found that the checks carried out by the compliance office were merely formal and however lacking, and the same went for the training activities attended by the sales officers.

Essentially, the Court observed that, despite the theoretical adequacy of the organisational model implemented by the society under Legislative Decree 231/01, the procedural framework required by the law was in practice not enacted nor efficient.

As a result, the company was held liable for having failed in the proper supervision of the non-senior management individuals who committed the corrupt conducts. In fact, the senior managers never received any warnings about the existence of certain anomalous facts or alarming circumstances, such as changes in retail prices or the existence of a conflict of interest between the society and the doctors, which could have been judged a warning sign that a bribery was in the making.

Keeping the ODV in the dark about what happens within a society’s framework becomes therefore a criterion to affirm the weakness of that society’s organisational model. Moreover, the sanctioning and disciplinary system required by the model law was judged overall unapplied.

Moreover, the Court decided to apply extenuating circumstances given the fact that the company compensated the civil parties, gave to the authorities the profits obtained through the crimes’ commission and upgraded its preventive and organisational model procedures through the help of a consulting firm. Similarly, the reorganisation of ODV activities through the strengthening of the communicative flows between the ODV and the internal audit, the carrying out of independent assessment activities and the implementation of significant training in the area of ethical behaviors and compliance, determined the application of attenuating circumstances too.

Now, we have to wait for the appeal verdict which should arrive before the end of the year, considering also that the same doctors whom the Criminal Court of Milan held liable for bribery, have been acquitted in front of the Court of Appeal with a reform ruling.

In another recent case (GUP Trib Parma, sent N 497/22), which was in some ways similar to the previous one (bribery in the healthcare sector), the preliminary hearing judge came to a different conclusion. The companies involved in the trial were acquitted because they proved the preventive effectiveness of organisational models adopted before the commission of the corruption offences. After mapping out the specific risks inherent in their organisation, these pharmaceutical companies had adopted special rules of conduct and had provided for specific procedures sponsoring conference events, educating and training their employees in bribery themes.

Moreover, the companies had autonomous independent ODV to monitor, through periodic checks and audit procedures, including external audits, the compliance with the company’s procedures. A disciplinary system had also been introduced to punish violations of the requirements set out in the model.

To conclude, beyond the media noise created by corruption trials of this kind, the cases presented in this article show that the Italian judicial system is highly protective of companies’ rights, but it also demands that every company equip itself with a suitable corporate system to prevent and minimise the risk of committing crimes. Adopting a D Lgs 231/01 model, procedures, internal controls and employee training can avoid heavy sentences for companies Constitutional principles aside, all degrees of judgment are mutually independent, even though when dealing with highly controversial issues the overturn of verdicts is not rare at all.

Thereby, as a result of the investigations or scandal, many pharmaceutical companies have decided to upgrade their internal organisation and implement appropriate internal checks to prevent their employees or associates from ever engaging in corrupt agreements and they are verifying the effective efficiency of their internal procedures, monitoring systems and organisational models, so no criminal activity can occur.