Johnson & Johnson (J&J) on Friday agreed to pay US$70 million to settle US charges that it paid bribes and kickbacks to win business overseas, the first big drug company to settle since the administration of US President Barack Obama began its scrutiny of the industry more than a year ago.
J&J agreed to pay a US$21.4 million fine to settle Justice Department criminal charges and pay more than US$48.6 million in disgorgement and interest to settle charges by the Securities and Exchange Commission (SEC), the agencies said.
The Justice Department announced in November 2009 that it would focus on prosecuting those in the pharmaceutical industry who try to bribe foreign officials for preferential treatment of their products, leading to a wide-ranging probe.
Dating back to 1998, subsidiaries of the company were accused of paying bribes to public doctors in Greece to select its surgical implants and in Romania to prescribe its medicines.
J&J units were also accused of paying bribes to public doctors and hospital administrators in Poland to win contracts and of paying kickbacks to Iraq to win 19 contracts under the UN’s Oil for Food Program.
Iraq had demanded that companies pay a 10 percent fee in order to do business with the government of former Iraqi leader Saddam Hussein, J&J said in a statement.
“More than four years ago, we went to the [US] government to report improper payments and have taken full responsibility for these actions,” J&J chairman and CEO William Weldon said in a statement.
J&J did not admit or deny the SEC’s allegations, but acknowledged responsibility in the Justice Department case for the actions of its units, employees and agents who made the improper payments.
Under the settlement, J&J will enter into a deferred prosecution agreement with the Justice Department.
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