Johnson & Johnson ($JNJ) has come to terms with the U.S. government again--and this time, it's not about recalled drugs, but overseas corruption. After several years of investigation by the Securities and Exchange Commission, as well as regulators in the UK, J&J has agreed to pay $70 million to settle allegations that it bribed doctors in Europe and paid kickbacks to win contracts in Iraq. The deal includes a $21.4 million criminal fine.
Various J&J units ran afoul of the Foreign Corrupt Practices Act in several countries, the government says. Its DePuy unit paid doctors in Greece to use its orthopedic devices, while doctors and hospital administrators in Poland got bribes in exchange for contracts. The company also bribed doctors in Romania to prescribe J&J meds. Meanwhile, other J&J subsidiaries paid kickbacks to Iraq to get contracts under the U.N. Oil for Food program.
J&J won some points with U.S investigators for reporting possible violations of the Foreign Corrupt Practices Act back in 2007. The Justice Department said that the settlement terms reflect the fact that J&J 'fessed up and cooperated with the probe. "More than four years ago, we went to the government to report improper payments and have taken full responsibility for these actions," J&J CEO Bill Weldon said in a statement. "We are deeply disappointed by the unacceptable conduct that led to these violations. We have undertaken significant changes since then to...ensure this does not occur again."
The settlement comes after more than a year of bad news from J&J, which has recalled dozens of drugs and other products. The FDA is now overseeing three of its consumer drug plants, and the company has reorganized its compliance efforts in an attempt to rectify its shortfalls. Recently, J&J announced a major overhaul of its consumer division, in which it split off its U.S. consumer drugs business for a turnaround.