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Abstract
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The US Department of Justice has made inquiries with at least three major drug makers—AstraZeneca, Roche, and Johnson & Johnson—relating to contracts they held in 2005-09 to supply Iraq’s health ministry with drugs and medical equipment.
The ministry was controlled at the time by the Mahdi Army, a Shiite militia, which used bribes or “commissions” paid by the drug makers to finance a roadside bombing campaign against US soldiers, says a lawsuit filed by the families and estates of dozens of US soldiers who were killed or injured by those bombs.1
That lawsuit was filed last October in a District of Columbia court against five companies and their subsidiaries. But the US justice department’s apparent interest in the case is new and came to light when the UK based AstraZeneca mentioned the suit in a securities filing at the end of July. Under “other legal matters,” the company referred to an “Iraq ministry of health litigation/anti-corruption probe.”
The justice department’s inquiry is “in connection with an anti-corruption investigation,” the company reported, and touches on “certain of the same matters alleged in the lawsuit.”
Days later, Johnson & Johnson made a similar statement in its quarterly filing to the Securities and Exchange Commission. A Roche spokesman also confirmed that the company had received an inquiry from the justice department.
Two other companies targeted by the US veterans’ lawsuit—Pfizer and a healthcare subsidiary of General Electric—have yet to file or make a statement about the justice department’s interest.
Alleged inducements
The lawsuit accuses the companies of paying inducements to officials in Iraq’s health ministry to obtain lucrative contracts. These bribes averaged about 20% of the contracts’ value and were typically provided in the form of free medical goods, the suit alleges, noting that this is a common form of bribery in the Middle East because, unlike cash transfers, the company can claim charitable goals if the goods are discovered.
The ministry officials, most of them doctors, were also senior members of the Mahdi Army ...
Language: en |