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July 31, 2015

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US baby milk producer pays US$12m after bribery charge

AMERICAN infant formula producer Mead Johnson Nutrition has agreed to pay US$12 million to settle federal civil charges that its Chinese subsidiary paid hospital staff to recommend its products to new mothers and pregnant women, the United States Securities and Exchange Commission (SEC) said on Tuesday.

The Illinois-based company, which operates worldwide and makes the Enfamil formula, neither admitted nor denied SEC findings that it violated the Foreign Corrupt Practices Act that prohibits bribery to secure business.

“We are pleased to have reached this final resolution,” its chief executive Kasper Jakobsen said in a statement.

The SEC said the Chinese unit paid doctors and other professionals in state hospitals to recommend the formula and to give the company the contact information of patients for marketing purposes.

A total of US$2 million worth of improper payments were made between 2008 and 2013, generating nearly US$8 million in profit for the company, the SEC said.

Jakobsen said the company will continue to stress principles of integrity and compliance with the law “in all our interactions with customers and business partners.”

Last year, the China branch of British drugmaker GlaxoSmithKline (GSK) was fined 3 billion yuan (US$483 million) — the biggest ever issued by a Chinese court — after being found guilty of paying bribes to boost sales of its products.

Five employees, including a British national and the former manager of GSK China, were given suspended jail sentences of between two and four years.




 

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