Four of Big Five Settle with DOJ; Compliance Monitors Leave
BY DAVID KRESSEL, MARCH 31, 2009
Eighteen months after the Department of Justice entered into Deferred Prosecution Agreements (DPA) with Smith & Nephew, Johnson & Johnson (Depuy), Zimmer and Biomet, and a Non-Prosecution Agreement with Stryker, the DOJ has announced it has dismissed the criminal charges brought against the companies and let the Agreements expire as planned. This also means the corporate compliance monitors appointed by the US Attorney's office of New Jersey will also be removed. Going forward, the four companies with DPAs will be subject to Corporate Integrity Agreements through September 2012. Stryker has dealt with moderately less punishment due to its more voluntary compliance with the investigation.
This won't cause much to change in the way of business practices, as each company has already revamped its compliance and consulting programs to conform to the letter of the law and these changes will stay in place. Financially there will be two offsetting effects. On the plus side, it will lead to cost savings from lower consulting fees and the end of corporate compliance monitors, which are paid for by the companies, not the government. On the other hand, these companies will continue to spend millions of dollars to maintain their compliance infrastructures.
