Glaxo Vies with J&J for Infamy
According to casual research, Johnson & Johnson is usually the top contender in the World Cup of Corruption. Just Google “J&J” along any number of incriminating terms such as fraud, corruption, guilty, etc. any day of the week and you’ll come up with stories like this one about the $1.1 billion fine J&J recently incurred in Arkansas for flat-out lying about drugs they were pushing in nursing homes.
Judge Tim Fox found nearly 240,000 violations under Arkansas’ Medicaid-fraud law over Risperdal. Each violation came with a $5,000 fine, setting the total penalty at more than $1.1 billion. Arkansas sued Johnson & Johnson and subsidiary Janssen Pharmaceuticals Inc. in 2007 over the drug... Previous verdicts against J&J include a $327 million civil penalty in South Carolina that a judge upheld in December. Texas, meanwhile, reached a $158 million settlement with Janssen in January in which the company did not admit fault.
Such behavior seems at odds with the company’s famous credo, which the company delcares, “challenges us to put the needs and well-being of the people we serve first.” And what a challenge! The hallowed document goes on at some length about the first priority being the need to turn a profit for shareholders; “Our Credo is more than just a moral compass. We believe it’s a recipe for business success.”
It appears that the real recipe for business success involves building the cost of bribery, lawsuits and fines into the overhead.
Meanwhile, despite evidence to the contrary, GlaxoSmithKline insists that it “is committed to operating its business to the highest ethical standards.” Prosecutors in Britain beg to differ: GlaxoSmithKline Under Investigation by Serious Fraud Office … says the NYT. GSK’s behavior even makes the Chinese blush:
This month, the Chinese authorities accused Mark Reilly, the former head of Glaxo’s operations in China, of ordering employees to bribe doctors and other hospital staff to use the drug maker’s products, resulting in more than $150 million in illegal revenue. Two other Chinese-born Glaxo executives were also charged in the matter.
What would these companies do without their credos and high ethical standards?