DOJ Punishes Big Pharma for Bribing Foreign Doctors, Ignores Corruption Here

Pharmaceutical executive Robert John Dougall has been sentenced to 12 months in prison for paying £4.5 million to Greek medical professionals. As Director of Marketing at DePuy International Ltd (DPI), now part of megacorporation Johnson & Johnson, he bribed Greek orthopedic surgeons to purchase their products. It’s a start, but why is the Department of Justice (DOJ) only focusing on foreign doctors?

Dougall pleaded guilty at Southwark Crown Court in the UK. The doctors took the bribes, but Greek taxpayers paid the bill for the products.

The Scam

Shortly after being named Director of Marketing, Dougall was also given charge of business development in Greece. Apparently, he took that to mean making money by any means possible; he didn’t take any of the money himself.

Medec SA, owned and operated by Nikolaos Karagiannis, was the Greek distributor for DePuy. Commissions had historically been paid to another Karagiannis company, Madison Management Limited, on the Isle of Man, an island with semi-independent status just off the coast of England, making it a convenient location for international banking. It was understood that part of those commissions was used by Karagiannis to induce and reward surgeons for buying DePuy products.

Under Dougall, the program was expanded and payments were disguised as “Professional Education”. The indictment covered the time from February 2002 to December 2005. During that time, the standard payments to Greek physicians was 20% of the sales price. About £4.5 million was used in these bribes.

Dougall is a cooperating defendant. There is an ongoing investigation into the involvement of others.

United States Involvement

The case was originally referred to the UK by the US Department of Justice (DOJ). At the 10^th Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum, Assistant Attorney General Lanny Breuer stated that the DOJ was going after Big Pharma by applying the Foreign Corrupt Practices Act. He told them that prosecutors

will be intensely focused on rooting out foreign bribery in your industry. That will mean investigation and, if warranted, prosecution of corporations, to be sure, but also it will involve investigation and prosecution of senior executives.

I don’t care if you’re a physician and I don’t care if you’re the clerical worker. It has to do with what you do. But if you do it, your MD degree is not going to be a shield.

There are signs that those weren’t just words. On the same day in 2007 that Johnson & Johnson publically admitted to responsibility for its subsidiary’s corruption, their international chairman for medical devices, Michael J. Dormer, retired. He cited Johnson & Johnson’s internal review and admitted that he held “ultimate responsibility by virtue of my position”.

Implications for the US and UK

Is this the beginning of the end for Big Pharma’s doctor buying? One can hope—but don’t hold your breath…

Read the rest here.