Last Updated Apr 15, 2010 12:50 PM EDT
Quite possibly, it is. The Department of Justice warned the pharmaceutical industry in November 2009 that it was coming after companies who pay bribes under the Foreign Corrupt Practices Act. "That will mean investigation and, if warranted, prosecution of corporations, to be sure, but also it will involve investigation and prosecution of senior executives." Asst. Attorney General Lanny Breuer said at the time.
Robert John Dougall, director of marketing at J&J's DePuy medical-device unit since 1999, paid Â£4.5 million in corrupt payments to medical professionals within the Greek state healthcare system, according to the U.K.'s Serious Fraud Office.
Dougall's guilty plea appears to be the latest development in a probe of J&J that has been ongoing since at least 2007, when J&J admitted "that subsidiaries outside the United States are believed to have made improper payments in connection with the sale of medical devices in two small-market countries. The actions were contrary to the Company's policies, and the payments may fall within the jurisdiction of the Foreign Corrupt Practices Act."
On the same day, J&J's worldwide chairman for medical devices & diagnostics, Michael J. Dormer, "retired" from his job, citing the "internal review" and admitting "ultimate responsibility by virtue of my position" for the corruption.
The probe isn't limited to J&J. Other medical-device makers such as Biomet, Zimmer Holdings (ZMH), Smith & Nephew (SNN) and Medtronic (MDT) all disclosed that federal regulators were investigating their foreign sales.
The tide has been turning against pharma-funded doctor education, or "continuing medical education," for some time now. The Canadian Medical Association recently drew fire for receiving a $78,000 CME grant from Pfizer. Joel Lexchin, a health-policy professor at York University in Toronto, described it as too close to a "gift relationship." Blogger and psychiatrist Daniel Carlat has been arguing that CME is corrupt at its core for years.
The specific difference between the way U.S. companies pay doctors to give talks to other doctors in CME sessions and what happened in Greece appears to center on the overtness of the Greek payments. The SFO said, "the level of funds made available ... for 'Prof Ed' purposes was a standard 20% of the value of end-user sale price." One assumes that no one in the U.S. would be stupid enough to link their CME payments to a portion of expected revenues ... surely?
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