Johnson and Johnson 2009 Annual Report Download - page 63

removed to federal court, have been consolidated for pre-trial pur-
poses in a Multi-District Litigation (MDL) in Federal District Court
in Boston, Massachusetts. The plaintiffs in these cases include
classes of private persons or entities that paid for any portion of the
purchase of the drugs at issue based on AWP, and state government
entities that made Medicaid payments for the drugs at issue based
on AWP.
The MDL Court identified classes of Massachusetts-only pri-
vate insurers providing “Medi-gap” insurance coverage and private
payers for physician-administered drugs where payments were
based on AWP (“Class 2” and “Class 3”), and a national class of
individuals who made co-payments for physician-administered
drugs covered by Medicare (“Class 1”). A trial of the two Massachu-
setts-only class actions concluded before the MDL Court in Decem-
ber 2006. In June 2007, the MDL Court issued post-trial rulings,
dismissing the Johnson & Johnson defendants from the case regard-
ing all claims of Classes 2 and 3, and subsequently of Class 1 as well.
Plaintiffs appealed the Class 1 judgment and, in September 2009,
the Court of Appeals vacated the judgment and remanded for
further proceedings in the District Court. AWP cases brought by
various Attorneys General have proceeded to trial against other
manufacturers. One state case against certain of the Company’s
subsidiaries has been set for trial in late 2010, and other state cases
are likely to be set for trial thereafter.
OTHER
In July 2003, Centocor (now COBI), a Johnson & Johnson sub-
sidiary, received a request that it voluntarily provide documents and
information to the criminal division of the U.S. Attorney’s Office,
District of New Jersey, in connection with its investigation into vari-
ous Centocor marketing practices. Subsequent requests for docu-
ments have been received from the U.S. Attorney’s Office. Both the
Company and Centocor have responded to these requests for
documents and information.
In December 2003, Ortho-McNeil (now OMJPI) received a
subpoena from the U.S. Attorney’s Office in Boston, Massachusetts
seeking documents relating to the marketing, including alleged off-
label marketing, of the drug TOPAMAX® (topiramate). Additional
subpoenas for documents have been received, and current and for-
mer employees have testified before a grand jury. Discussions are
underway in an effort to resolve this matter, but whether agreement
can be reached and on what terms is uncertain.
In January 2004, Janssen (now OMJPI) received a subpoena
from the Office of the Inspector General of the U.S. Office of Person-
nel Management seeking documents concerning sales and market-
ing of, any and all payments to physicians in connection with sales
and marketing of, and clinical trials for, RISPERDAL® (risperidone)
from 1997 to 2002. Documents subsequent to 2002 have also been
requested. An additional subpoena seeking information about mar-
keting of and adverse reactions to RISPERDAL® was received from
the U.S. Attorney’s Office for the Eastern District of Pennsylvania in
November 2005. Subpoenas seeking testimony from various wit-
nesses before a grand jury have also been received. Janssen is
cooperating in responding to ongoing requests for documents
and witnesses. The government is continuing to actively investigate
this matter. In February 2010, the government served Civil Investiga-
tive Demands seeking additional information relating to sales and
marketing of RISPERDAL® and sales and marketing of INVEGA®.
In September 2004, Ortho Biotech Inc. (Ortho Biotech) (now
COBI), received a subpoena from the U.S. Office of Inspector Gen-
eral’s Denver, Colorado field office seeking documents directed to
the sales and marketing of PROCRIT® (Epoetin alfa) from 1997
to the present, as well as to dealings with U.S. Oncology Inc., a
healthcare services network for oncologists. Ortho Biotech (now
COBI) has responded to the subpoena.
In September 2004, plaintiffs in an employment discrimination
litigation initiated against the Company in 2001 in Federal District
Court in New Jersey moved to certify a class of all African American
and Hispanic salaried employees of the Company and its affiliates in
the U.S., who were employed at any time from November 1997 to
the present. Plaintiffs seek monetary damages for the period 1997
through the present (including punitive damages) and equitable
relief. The Court denied plaintiffs’ class certification motion in
December 2006 and their motion for reconsideration in April 2007.
Plaintiffs sought to appeal these decisions and, in April 2008, the
Court of Appeals ruled that plaintiffs’ appeal of the denial of class
certification was untimely. In July 2009, plaintiffs filed a motion for
certification of a modified class, which the Company is opposing.
Plaintiffs are engaged in further discovery of individual plaintiffs’
claims. The hearing on plaintiffs’ motion for class certification is
scheduled for July 2010.
In March 2005, DePuy Orthopaedics, Inc. (DePuy), a Johnson
& Johnson subsidiary, received a subpoena from the U.S. Attorney’s
Office, District of New Jersey, seeking records concerning contrac-
tual relationships between DePuy and surgeons or surgeons-in-
training involved in hip and knee replacement and reconstructive
surgery. This investigation was resolved by DePuy and the four other
leading suppliers of hip and knee implants in late September 2007
by agreements with the U.S. Attorney’s Office for the District of
New Jersey. The settlements included an 18-month Deferred Prose-
cution Agreement (DPA), acceptance by each company of a moni-
tor to assure compliance with the DPA and, with respect to four of
the five companies, payment of settlement monies and entry into
five year Corporate Integrity Agreements. DePuy paid $85 million as
its settlement. The term of the Monitorship under the Deferred
Prosecution Agreement concluded on March 27, 2009, and an order
dismissing all charges was entered on March 30, 2009.
In November 2007, the Attorney General of the Common-
wealth of Massachusetts issued a Civil Investigative Demand to
DePuy seeking information regarding financial relationships
between a number of Massachusetts-based orthopedic surgeons
and providers and DePuy. DePuy is responding to Massachusetts’
additional requests.
In July 2005, Scios Inc. (Scios), a Johnson & Johnson subsidiary,
received a subpoena from the U.S. Attorney’s Office, District of Mas-
sachusetts, seeking documents related to the sales and marketing of
NATRECOR®. Scios responded to the subpoena. In early August
2005, Scios was advised that the investigation would be handled by
the U.S. Attorney’s Office for the Northern District of California in
San Francisco. Additional requests for documents have been received
and responded to and former Scios employees have testified before a
grand jury in San Francisco. The qui tam complaints were unsealed
on February 19, 2009. The U.S. government has intervened in one of
the qui tam actions, and filed a complaint against Scios and the Com-
pany in June 2009. Scios and Johnson & Johnson have filed a motion
to dismiss the qui tam complaint filed by the government, and that
motion was denied. The criminal investigation is continuing and dis-
cussions are underway in an effort to settle this matter. Whether a
settlement can be reached and on what terms is uncertain.
In September 2005, the Company received a subpoena from
the U.S. Attorney’s Office, District of Massachusetts, seeking docu-
ments related to sales and marketing of eight drugs to Omnicare,
Inc., a manager of pharmaceutical benefits for long-term care facili-
ties. The Johnson & Johnson subsidiaries involved responded to the
subpoena. Several employees of the Company’s pharmaceutical
subsidiaries have been subpoenaed to testify before a grand jury
in connection with this investigation. In April 2009, the Company
was served with the complaints in two civil qui tam cases related to
marketing of prescription drugs to Omnicare, Inc. On January 15,
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