Johnson & Johnson Agrees to Pay $70 Million to Settle Bribery Charges

Monday, April 11, 2011
Accused of bribery and providing kickbacks, Johnson & Johnson has agreed to pay the U.S. government $70 million to settle charges brought over its illegal activities in Europe and Iraq.
From 1998 to 2006, Johnson & Johnson, the world’s second-largest seller of medical products, made $24 million in profits by bribing doctors in Greece to buy surgical implants, including artificial knees and hips, according to the Securities and Exchange Commission (SEC). Bribes also helped the company earn $4.3 million in Poland and about $3.5 million in Romania.
In addition, Johnson & Johnson made illegal payments to Iraqi officials to win contracts under the U.N. oil-for-food program before the U.S. invasion of Iraq..
The settlement comprises $48.6 million to settle claims with the SEC and $21.4 million as a fine for criminal charges brought by the Department of Justice.
This latest embarrassment for Johnson & Johnson comes on the heels of a separate clash with federal regulators. Since the beginning of 2010, the company has been forced to recall more than 50 products. On March 10, Johnson & Johnson’s McNeil Consumer Healthcare unit signed a consent decree giving the Food and Drug Administration (FDA) oversight over three plants that make children’s Tylenol, Motrin and other drugs.
Among the violations the FDA cited the company for were shipping drugs that failed quality requirements, failing to identify product defects during routine testing, failing to detect incorrect expiration dates on drug labels, failing to adequately investigate product problems, failing to follow laboratory controls, and inadequate training of lab staff.
-David Wallechinsky, Noel Brinkerhoff
Johnson & Johnson Will Pay $70 Million Over Bribery Claims (by Joshua Gallu and Alex Nussbaum, Bloomberg)


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