June 22, 2017
Johnson & Johnson is set to dole out up to $33 million in settlement with 42 states over allegations that a subsidiary of the pharmaceutical drug giant sold nonprescription medicines that did not pass federal quality standards. The settlement agreement required the company to pay the amount, which would then be distributed to the District of Columbia and the 42 states that filed the case. The states that that did not participate in the case include Alabama, Georgia, Iowa, Mississippi, Oklahoma, Oregon, Utah, and Wyoming.
The agreement has also required Johnson & Johnson’s McNeil Consumer Healthcare unit to follow appropriate procedures in addressing any manufacturing issues with its nonprescription drugs. The company was also barred from advertising on its website any products that were recalled within the past year. However, the company took the deal in a more positive light, stating that it was pleased to have finally reached a settlement with the states. The company has also stressed that the recalls were precautionary in measure. As part of the agreement, McNeil-PPC did not admit to any wrongdoing.
“Those recalls were precautionary and not undertaken on the basis of any health or safety risks to consumers, and we remain committed to providing consumers with safe and effective over-the-counter medicines,” a company statement reads.
Details of the previous drug recalls
The settlement deal, announced by attorneys general for 42 states and the District of Columbia, was in line with the voluntary recall of popular over-the-counter drugs for children and adults such as Tylenol, Motrin, and Benadryl between 2009 and 2011. Other drugs included in the recall were: St. Joseph Aspirin, Sudafed, Pepcid, Mylanta, Rolaids, Zyrtec, and Zyrtec Eye Drops. The states filed a complaint against Johnson & Johnson, alleging that the company subsidiary McNeil-PPC committed consumer fraud by selling sub-par medications under the impression that they were manufactured following government safety standards.
Illinois Attorney General Lisa Madigan’s office noted that the U.S. Food and Drug Administration (FDA) found that some facilities did not follow these safety practices during their operations between 2009 and 2011. In 2015, the company’s McNeil-PPC subsidiary pleaded guilty to selling liquid medicine contaminated with metal and agreed to a settlement deal of $25 million in order to resolve an inquiry conducted by the U.S. Justice Department.
The voluntary recalls of drug products made at J&J factories in Puerto Rico and suburban Philadelphia were prompted by reports of an unpleasant odor that nauseated some customers, tiny metal shards in liquid medicines, and unreliable ingredient levels. Many of these products have been unavailable for years. The New Brunswick, New Jersey-based company has since demolished these two failing facilities and reconstructed another huge consumer medicine factory in Fort Washington, Pennsylvania.
Amid the voluntary recalls between 2009 and 2011, Johnson & Johnson was embroiled in yet another controversy back in 2009 when the company was implicated in a “stealth recall” of Motrin. The pharmaceutical giant was found to pay secret shoppers to quietly purchase Motrin packages from convenience stores and other retail stores without identifying themselves. The secret shoppers were also discouraged from acknowledging that some Motrin tablets do not dissolve properly.
States get their share of the J&J penalty money
Under the settlement agreement, the $33 million compensation is to be divided between the participating states and the District of Columbia. California is set to receive the largest chunk of the amount at $2.3 million. However, California Attorney General Xavier Becerra noted that final agreement is subject to court approval. On the other hand, Illinois is set to receive more than $1 million in compensation. Illinois Attorney General Lisa Madigan said the money will go to the state.