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Johnson & Johnson settles bribery case with Feds

Fri, 04/08/2011 - 9:17am
DANIEL WAGNER - AP Business Writers - Associated Press

Pharmaceutical giant Johnson & Johnson has agreed to pay $70 million to settle civil and criminal charges of bribing doctors in Europe and paying kickbacks to the Iraqi government to illegally obtain business.

The Securities and Exchange Commission said Friday that the company settled the charges with the agency and the Justice Department without admitting or denying guilt.

The government accused J&J subsidiaries of providing money and travel gifts to doctors in Greece, Poland and Romania in exchange for their prescribing J&J products to patients. The SEC says J&J agents used fake contracts and sham companies to deliver the bribes. The SEC says the bribes began at least 13 years ago.

J&J subsidiaries also allegedly paid kickbacks to the Iraqi government to obtain contracts under the United Nations Oil for Food Program.

J&J said in a statement that it alerted the government to the medical device kickbacks in 2007. The company identified similar violations across multiple businesses over the next three years, it said.

"We went to the government to report improper payments and have taken full responsibility for these actions," said William Weldon, Chairman and CEO of J&J. "I know that these actions are not representative of Johnson & Johnson employees around the world who do what is honest and right every day."

A spokeswoman for the company added that none of the employees cited in the charges are currently employed by J&J. The company said it expects to reach a settlement with regulators in the United Kingdom in the next several days.

The charges against J&J were brought under the Foreign Corrupt Practices Act, which bars publicly traded companies from bribing officials in other countries to get or retain business. In the past five years, the Justice Department has investigated several companies that sell medical devices in foreign countries for violating the law.

J&J's household reputation has been battered in the past year by a string of recalls, including over-the-counter medicines — such as Children's Tylenol and Benadryl — contact lenses and orthopedic hips.

Last month federal health regulators took legal control of the plant where millions of bottles of defective medication were produced.

The New Brunswick, New Jersey-based health care company sells everything from Band-Aids to biotech drugs. J&J shares rose 7 cents to $59.55 Friday

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AP Health Writer Marley Seaman contributed to this article from New York.

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