Johnson & Johnson has agreed to pay a total of £70 million to settle violations of the Foreign Corrupt Practices Act (FCPA) after bribing public doctors throughout Europe and paying kickbacks to Iraq to illegally obtain business.
Following a global investigation the US Securities and Exchange Commission claims that, since at least 1998, subsidiaries of J&J paid bribes to public doctors in Greece for choosing the firm's surgical implants, public doctors and hospital administrators in Poland who dished out contracts to J&J, and doctors in Romania who agreed to prescribe its pharmaceutical product to patients.
In addition, in a separate investigation subsidiaries of the Brunswick, New Jersey-based firm also paid kickbacks to Iraq to secure 19 contracts under the United Nations Oil for Food Program.
According to Robert Khuzami, Director of the SEC's Division of Enforcement, "|J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, off-shore companies, and slush funds to cover its tracks.”
Advantages a 'mirage'
But he stressed that "the message in this and the SEC’s other FCPA cases is plain – any competitive advantage gained through corruption is a mirage."
Commenting on the case, William Weldon, J&J's chairman and chief executive officer, said the firm is "deeply disappointed by the unacceptable conduct that led to these violations", but added that significant changes have been undertaken since then to improve its compliance efforts, "and we are committed to doing everything we can to ensure this does not occur again".
J&J also noted that it hopes to reach a settlement of a related investigation by the UK Serious Fraud Office within the next few days.