From pharmaceutical companies to those that manufacture and sell medical devices, when it comes to providing hospitals and individual doctors with the types of equipment and medical drugs they need to help save patients’ lives, there are literally billions of dollars at stake. Unfortunately, some companies will go to great, not to mention illegal, lengths to ensure that they receive a piece of the pie.
The U.S. Justice Department recently agreed to settle with the medical device company Olympus Corp. of the Americas after a former compliance officer at the company came forward and accused Olympus of “offering kickbacks to doctors and hospitals in the U.S. and Central and South America to increase sales of medical equipment.” Specifically, the whistleblower accused the company of providing the kickbacks to encourage the purchase of medical devices including endoscopes.
The $646 million settlement is the largest ever kickback case settled by the U.S. government and, under the False Claims Act, resulted in the whistleblower receiving $51 million. The case is also significant in that it proves the U.S. government’s willingness and apparent success in rewarding employees who are willing to come forward and report the illegal actions of employers who violate U.S. and international laws.
Under provisions of the Foreign Corrupt Practices Act, foreign companies are barred from providing “payments to foreign officials to obtain business.” In addition to the direct payout to the whistleblower, Olympus’ violation of the FCPA means that the company must pay $311 million related to the government-joined whistleblower lawsuit, $340 million in criminal penalties and $22 million related to charges of foreign bribery.
Source: Forbes, “Whistleblower Delivers A Triple Whammy To Olympus; More Companies Might Get Hit,” Erika Kelton, March 4, 2016