Reply #53: J&J Executive Departs After Company Reports Improper Payments [View All]

[UpInArms]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_6UECHmmIKU&refer=home

Feb. 13 (Bloomberg) -- Johnson & Johnson, the world's largest maker of health-care supplies, said subsidiaries in two countries made improper payments in marketing medical devices, and the executive in charge stepped down.

The payments violated company policies and may also break rules under the Foreign Corrupt Practices act, the company said in a statement yesterday. J&J said it voluntarily reported the payments in ``two small-market countries'' to the U.S. Justice Department and the Securities and Exchange Commission.

Michael Dormer, 54, the worldwide chief of medical devices and diagnostics, retired and took ``ultimate'' responsibility. Dormer was in charge of operations that generated $20.3 billion in revenue, or almost 40 percent of last year's total sales. The company's device business, the biggest in the world, makes Cypher heart stents and DePuy artificial hip and knee joints.

``J&J management probably had to find a way to make it clear to authorities that this matter is being taken seriously, potentially pre-empting federal enforcement action,'' said Glenn Reicin, an analyst with Morgan Stanley in New York, in a research note.

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Companies convicted of a felony can be barred from selling medicines to government health programs for the elderly and poor, including Medicare, which could represent millions of dollars in lost sales.

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