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Monthly Archive for: ‘May, 2011’

Avon Fires Four Executives Suspected of Bribery Scheme in China Unit

Just over a year ago, Avon Products suspended four executives as the company investigated questionable payments to officials in various international markets. Last week, Avon disclosed in a Securities and Exchange Commission filing that it had fired four executives accused of paying bribes to Chinese government employees and was continuing to investigate possible corruptions in other countries.

The fired executives were the former general manager for China; the former head of corporate affairs for China; the former head of finance for China; and the former head of global internal audit and security, who was previously head of finance for the Asia Pacific region.

According to Avon’s May 3, 2011, 10-Q filing, the internal investigation reviewed various expenses and books and records processes, including, “travel, entertainment, gifts, use of third party vendors and consultants and related due diligence, joint ventures and acquisitions, and payments to third-party agents and others, in connection with our business dealings, directly or indirectly, with foreign governments and their employees.”

The filing said the internal investigation is continuing and could result in additional “personnel actions.” In addition, Avon said that continues to develop and enhance its U.S. Foreign Corrupt Practices Act compliance-related training, FCPA third party due diligence program and other compliance-related resources.

FDA and FTC Launch Joint Fraudulent STD Products Initiative

In a relatively rare joint-agency action, the Federal Trade Commission and the Food and Drug Administration have launched the “Fraudulent STD Products Initiative,” to identify and remove over-the-counter products that make unproven claims to prevent, cure, and/or treat sexually transmitted diseases (STDs).

The products targeted have not been evaluated by the FDA for safety and effectiveness and may pose significant public health risk since they could delay proper medical treatment and help spread disease.

In the first step of the initiative, FDA and FTC have “co-signed” warning letters to manufacturers and others involved in the marketing of the fraudulent STD products. The letters list specific violations of FDA and FTC regulations, and the two agencies will monitor the responses and take additional action as needed to ensure enforcement. Among the products targeted are Medavir, Herpaflor, Viruxo, C-Cure, and Never An Outbreak.

The companies that received the warning letters claim that their products treat a range of STDs, including herpes, chlamydia, genital warts, HIV, and AIDS. Some of the products are marketed as dietary supplements, but since they are being sold to treat disease, the FDA considers them all drug products that fall under the jurisdiction of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and cannot be sold through interstate commerce without an FDA-approved new drug application.

On the FTC side of the initiative, FTC considers the marketing of the products a “scam” utilizing deceptive advertising practices. They are being advertised as offering health benefits that are not supported by scientific evidence and  thus violate the FTC act.