The FCPA enforcement landscape facing life sciences companies doing business abroad

February 2026  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2026 Issue

Over the last 20 years, the Foreign Corrupt Practices Act (FCPA) has been a cornerstone of US efforts to combat international bribery and corruption. Until recently, FCPA enforcement has been particularly robust against corporations, especially in the healthcare industry.

FCPA enforcement throughout the Obama and Biden presidencies, and even under the first President Trump administration, continued to target pharmaceutical and medical device companies’ offers of items and services to government-employed healthcare professionals (HCPs) in countries with government-run medical systems, applying an expansive construction of ‘foreign official’ to include any individual who works for a public hospital or medical provider.

However, the current administration’s FCPA enforcement efforts against these industries remain to be seen, as it has sought to recalibrate enforcement priorities to align with US economic and national security interests.

At the same time, while the administration’s approach to enforcement in the healthcare sector continues a trend dating back decades of prioritising the deterrence of fraud and abuse, it has also highlighted additional enforcement priorities across the healthcare sector, including the protection of patient safety and encouraging the ‘domestication’ of pharmaceutical and device manufacturing through the aggressive passage and anticipated enforcement of tariffs aimed at furthering this policy.

Corporate enforcement policy changes under Trump 2.0

With the transition to Trump’s second term, FCPA enforcement underwent significant changes, driven by new policy directives and executive actions.

The administration fired its first salvo signalling a major shift in FCPA enforcement less than four weeks after taking office, with the issuance of a memorandum by Pam Bondi, US attorney general, titled ‘Total Elimination of Cartels and Transnational Criminal Organizations’.

In that memorandum, Ms Bondi declared, among other things, that FCPA enforcement would be limited to cases involving transnational criminal organisations (TCOs) or cartels. Five days later, President Trump issued Executive Order 14209 (EO 14209) – ‘Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security’ – which temporarily halted the opening of new FCPA investigations, required a review of ongoing cases to ensure enforcement aligns with US economic and national security priorities, and required the DOJ to develop new FCPA enforcement guidelines.

As directed by EO 14209, on 9 June 2025, Todd Blanche, deputy attorney general, released the updated guidelines. The new guidelines centre on aligning anti-bribery enforcement with US economic and national security interests, as well as broader foreign policy objectives.

According to the guidelines, enforcement will prioritise cases where foreign bribery schemes distort markets and harm US companies’ ability to compete abroad. The focus will be on misconduct that deprives identifiable American businesses of opportunities or causes economic injury, rather than penalising routine business practices or minor courtesies. This shift aims to protect US enterprises from unfair disadvantages created by corrupt competitors.

The new guidelines also direct federal prosecutors to target corruption that threatens US strategic interests, particularly in sectors like defence, critical infrastructure and key resources. It observes that bribery schemes in these areas can undermine national security by enabling adversaries or destabilising regions critical to US interests and asserts that strong indicators of corrupt intent tied to individuals, such as significant bribe payments and concealment, will be central to the DOJ’s investigative and charging decisions.

Moreover, as DOJ officials made clear in statements in November 2025, where a foreign official is accepting bribes from a TCO or cartel and also accepting bribes from a company, that nexus could be sufficient to warrant FCPA enforcement against the company. For pharmaceutical and medical device companies that manufacture products in Mexico and other countries where TCOs have significant operations, particularly with respect to logistics, this renewed focus should warrant consideration in FCPA risk management.

Perhaps most relevant to pharmaceutical and device companies doing business in countries with socialised healthcare systems, the new FCPA guidelines focus on prioritising serious bribery schemes and not criminalising routine business conduct, de minimis or low-dollar payments, and generally accepted business courtesies. This is particularly relevant to the life sciences sector, where prior FCPA enforcement has often focused on gifts, speaking fees, travel and sponsorships, which are common practices in the industry. While extreme examples involving multiple violations would still fall well within the ambit of the guidelines, smaller or fringe cases may be less likely to warrant DOJ resources under the guidelines.

Finally, although not expressly addressed in the new FCPA guidelines, FCPA enforcement will undoubtedly also be guided by the principle underlying EO 14209’s directive to the attorney general to “take appropriate action” with respect to then-existing FCPA investigations and enforcement actions: to “preserve Presidential foreign policy prerogatives”.

Foreign policy considerations that could conceivably impact FCPA enforcement discretion include enforcement against conduct, including: (i) by foreign companies the administration considers important to its military or economic objectives; (ii) in countries with, or by companies favoured by, foreign governments in which the administration is engaged in trade negotiations; and (iii) in countries with, or by companies favoured by, foreign governments from which the administration is seeking military cooperation.

In summary, based on the administration’s enforcement guidance, FCPA investigations are expected to pursue conduct that undermines US influence or facilitates transnational criminal organisations and cartels, or otherwise poses threats to national security. Moreover, the DOJ is likely to avoid jurisdictions, industries and companies where enforcement may compromise US foreign policy objectives, and allegations of FCPA violations involving only smaller gifts, travel and sponsorship expense reimbursement for HCPs.

The DOJ reviewed existing cases under these principles, closing some and advancing others, and shifting toward individual accountability rather than broad corporate liability. For example, even before the issuance of the new FCPA Guidelines, in April 2025, the DOJ announced its closure without action of separate FCPA investigations into both PetroNor E&P ASA, a Norway-based oil and gas company, and Digicel, a Jamaica-based telecommunications company, and ended early the monitorships imposed on two other companies pursuant to deferred prosecution agreements entered into under the Biden administration.

The SEC is expected to follow the administration’s lead in terms of its FCPA enforcement jurisdiction – the internal controls and books and records provisions of the FCPA – as indicated by the SEC’s dismissal of an FCPA case “as a policy matter”, and its recent creation of a cross-border fraud taskforce designed to bring cases that harm American interests where fraud or other schemes are committed by foreign parties.

Realignment of FCPA enforcement priorities: implications for corporate compliance

Against the backdrop of this new FCPA enforcement regime, life sciences companies could conceivably face lower enforcement risk with respect to the types of conduct covered by the FCPA resolutions reached under prior administrations. For example, the DOJ may not view the investigation of a company’s offering of speaker programmes, certain non-extravagant travel and entertainment, and paid consulting arrangements to HCPs employed by a foreign government, as consistent with the new FCPA enforcement priorities, at least where such conduct is not rampant and does not adversely affect US competitiveness in those non-US markets.

And of course, pharma and device companies should continue to maintain a robust compliance programme that covers both domestic and foreign business practices of the type subject to past enforcement trends. However, given this realignment of FCPA enforcement priorities, the life sciences industry would be remiss if they did not reassess their current FCPA compliance risk when deciding where to allocate compliance resources.

It is equally important to consider this realignment when considering whether FCPA violations discovered through internal processes are violations that the DOJ would consider within the scope of its new FCPA enforcement remit, and, if not, whether availment of the DOJ’s revised voluntary self-disclosure policy, and the costs and consequences of doing so, are warranted.

Overseas enforcement risks facing pharmaceutical and device companies

Under the second Trump administration, although FCPA enforcement in the pharmaceutical and device sector will likely remain active, its focus will most likely pivot so that it is more strategically aligned with the newly proclaimed economic and national security priorities.

Although the current FCPA enforcement landscape makes it less likely that pharmaceutical and device companies will be subject to enforcement action for ‘foot fault’ violations – for example, offers of goods and services to HCPs employed by non-US governments – other FCPA risks still remain to the extent they intersect with either the administration’s narrower set of FCPA enforcement priorities and its more general enforcement priorities in the healthcare space.

Key areas of concern include payments to government-employed healthcare professionals that involve substantial aggregate expenditures, undermine the competitiveness of US pharmaceutical or device companies, or relate to goods and services funded by federal healthcare dollars, such as Tricare, the Federal Employee Health Benefits Program, Veterans Affairs beneficiaries overseas or National Institute of Health-funded clinical trials involving non-US patients.

Risks also arise from payments to foreign officials that facilitate concealment of the true dollar value, harmonised tariff schedule (HTS) classification or country of origin of ingredient components or final products exported to the US, payments made to local officials intended to hide local health code violations or obstruct Food and Drug Administration inspections of non-US facilities, and payments aimed at rigging foreign government tenders for pharmaceuticals or devices to the detriment of US competitors.

Additional concerns include payments designed to distort or conceal global drug and device pricing strategies tied to US pricing, as well as payments to foreign officials associated with transnational criminal organisations to gain access to restricted distribution channels or markets.

Beyond corrupt payments, however, companies should also consider other overseas compliance risks tied to the administration’s other, broader healthcare enforcement priorities expressed in other enforcement pronouncements outside the FCPA context. These include misrepresentations in labelling, packaging or customs documentation regarding a product’s country of origin, HTS classification or valuation, material violations of current good manufacturing practices at overseas facilities, and inaccurate price disclosures for products sold abroad that affect most favoured nation pricing in the US.

Conclusion

Companies operating in the pharmaceutical and medical device sector should take this unique inflection point of administration realignment of both FCPA-specific and broader healthcare enforcement priorities to consider whether their compliance programme is appropriately addressing the combination of risks of FCPA enforcement – focusing on further national security and other American interests, and on the potential for enhanced usage of the FCPA against such companies.

Similarly, when information percolates to legal and compliance personnel through whistleblower channels or other avenues, it is important that internal reviews and investigations consider the evolving enforcement landscape.

 

Patrick Linehan and Claire Rajan are partners and Kristina Woodward is an associate at Steptoe. Mr Linehan can be contacted on +1 (202) 429 8154 or by email: plinehan@steptoe.com. Ms Rajan can be contacted on +1 (202) 429 6455 or by email: crajan@steptoe.com. Ms Woodward can be contacted on +1 (202) 429 8192 or by email: kwoodward@steptoe.com.

© Financier Worldwide

BY

Patrick Linehan, Claire Rajan and Kristina Woodward

Steptoe

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