Johnson & Johnson Agrees to Pay $70 Million in Bribery Scandal

Johnson & Johnson has agreed to pay $70 million to avoid criminal prosecution of bribery-related charges in the United Kingdom and the United States. The charges stemmed from an investigation of J&J business practices that found company officials offered bribes in return for the purchase of their medical device products. According to the Wall St. Journal, “As part of the settlement, J&J acknowledged responsibility for the actions of its units, employees and agents who made “various improper payments to publicly-employed health care providers in Greece, Poland and Romania in order to induce the purchase of medical devices and pharmaceuticals manufactured by J&J subsidiaries,” according to the Justice Department.
J&J also acknowledged that kickbacks were paid on behalf of J&J units to the former government of Iraq under the United Nations Oil for Food Program in order to secure contracts to provide humanitarian supplies. A UN-commissioned report had alleged more than 2,000 companies acquiesced to Iraqi government demands between 2001 and 2003 that they pay a 10% fee as a condition of importing humanitarian goods into the country. The U.S. invasion of Iraq in 2003 toppled Hussein’s government. J&J had informed U.S. authorities of possible violations of anti-foreign bribery laws in February 2007, a development that led to the departure of the head of the company’s medical device and diagnostics unit, Michael Dormer. The Foreign Corrupt Practices Act bars U.S. companies from paying foreign government officials to obtain or retain business.”
The news could not come at a worse time for Johnson & Johnson or its subisidiary DePuy Orthopaedics Inc. DePuy is facing multidstrict litigation lawsuits for its failed DePuy ASR XL hip devices and possible multidistrict lawsuits for its DePuy Pinnacle hips which have not been recalled but have been the subject of widespread complaints of similar failures.