Johnson & Johnson settles lawsuit filed by U.S. states, pharma magnate to pay USD 33 million

June 05, 2017

Johnson & Johnson, the renowned American healthcare giant, has reportedly finalized a settlement of USD 33 million with 43 states, in a bid to resolve the allegations piled against the company for marketing non-prescribed medicines that failed to meet the federal quality requirement standards. The situation has finally led to recall of certain drugs like Tylenol, Motrin, Benadryl, and Sudafed.  The list also includes St. Joseph Aspirin, Rolaids, Mylanta, Pepcid, and Zyrtec.

According to reports, the Attorney Generals of 42 states have sued Johnson & Johnson on two major grounds – for the violation of the consumer protection law and for jeopardizing the health of U.S. citizens by selling substandard medicines that are considered fraudulent and illegal. McNeil PPC - a subsidiary of Johnson & Johnson was allegedly accused over faulty manufacturing of drugs. Statistics depict that some of the drugs were also recalled between 2009 to 2011 as they failed to comply with the U.S. Food and Drug Administration standards.

Illinois, Virginia, and Kentucky are the three predominant states that have filed a major lawsuit against the drug company. Illinois’s share of the settlement sums up to USD 1 million which would be donated to the state government. The settlement will serve as a reminder for the company to undertake manufacturing processes that feed the federal standards. McNeil PPC was also accused in 2015 for commercializing drugs within the state that didn’t follow FDA standards. Back then, McNeil had settled the agreement by paying a criminal fine of USD 20 million.

Virginia is expected to receive an amount of USD 770,000 as a part of the settlement. As per the report, in 2009, Johnson & Johnson secretly carried out a “stealth recall” of Motrin packages. It is also reported that the company paid some retailers and a part of the mainstream consumers to sell and buy Motrin strips from their nearby stores without verifying the authenticity of the medicines. The agreement therefore, also includes a settlement between J&J’s McNeil Health care unit and the state regarding the non-advertisement of any product that had been recalled in the past years.

Kentucky is also slated to receive USD 574,000 as a settlement value by Johnson& Johnson over the same allegations of selling lower grade manufactured medicines in the state that didn’t meet safety standards.  It is reported by the attorney general, that the state’s General Fund will receive the money.

Though Johnson & Johnson has claimed that these recalls are only precautionary and need not be taken too seriously as a health risk to the consumers, the downturn of this health care pillar with regards to its ethical values will act as a roadblock in the company’s reputation globally.

As per the latest sources, California too is slated to receive a portion of the settlement amount.