Will J&J Be Given Leniency For Foreign Bribes?

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bribe.jpgLast February, the health care giant made a “voluntary disclosure” to US authorities about improper payments made by unspecified foreign subsidiaries in connection with the sale of medical devices in unnamed countries. And J&J acknowledged the payments may fall within the jurisdiction of the Foreign Corrupt Practices Act. So the Department of Justice and the Securities and Exchange Commission were notified. The global head of devices and diagnostics, meanwhile, retired and took responsibility for the mess.

This past week, several other device makers - Biomet, Zimmer Holdings, Smith & Nephew and Medtronic - disclosed that federal regulators are looking into their sales practices in foreign countries, The Indianapolis Star notes. In separate statements, they noted the SEC is investigating possible violations of the FCPA, which forbids US companies from bribing foreign government officials. All five say they’re cooperating.

The revelation comes just two weeks after several of the same big device makers agreed to pay $311 million to settle federal allegations that they gave money and gifts to surgeons, who agreed to use their products without disclosing the arrangements to patients or hospitals.

However, J&J’s DePuy orthopedic business didn’t receive a notice of the SEC investigation, a company spokeswoman tells the Star, which notes that voluntarily disclosing the improper behavior could help J&J avoid a federal investigation, because the first company to cooperate in an industrywide probe can negotiate a nonprosecution agreement.

Some observers says it’s unusual for device makers to face back-to-back federal probes, after years of operating quietly. “The medical device industry has not historically had the public focus on it as other industries have, like pharmaceuticals,” Walter Eisner, a journalist at Orthopedics This Week, tells the Star. “And it’s now paying the price. As it has grown, it’s getting the same kind of oversight others have gotten.”

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