Johnson and Johnson 2014 Annual Report Download - page 71

In July 2014, in response to a Paragraph IV Notice from Watson Laboratories, Inc. (Watson) with respect to the
NUCYNTA®oral solution product and the ’364 and ’593 patents, JPI filed a lawsuit in the United States District Court for
the District of New Jersey asserting the ’364 and ’593 patents against Watson.
In each of the above lawsuits, JPI is seeking an Order enjoining the defendants from marketing their generic versions of
NUCYNTA®ER and NUCYNTA®before the expiration of the asserted patents.
GOVERNMENT PROCEEDINGS
Like other companies in the pharmaceutical and medical devices industries, Johnson & Johnson and certain of its
subsidiaries are subject to extensive regulation by national, state and local government agencies in the United States and
other countries in which they operate. As a result, interaction with government agencies is ongoing. The most significant
litigation brought by, and investigations conducted by, government agencies are listed below. It is possible that criminal
charges and substantial fines and/or civil penalties or damages could result from government investigations or litigation.
Average Wholesale Price (AWP) Litigation
Johnson & Johnson and several of its pharmaceutical subsidiaries (the J&J AWP Defendants), along with numerous other
pharmaceutical companies, are defendants in a series of lawsuits in state and federal courts involving allegations that the
pricing and marketing of certain pharmaceutical products amounted to fraudulent and otherwise actionable conduct
because, among other things, the companies allegedly reported an inflated Average Wholesale Price (AWP) for the drugs
at issue. Payors alleged that they used those AWPs in calculating provider reimbursement levels. Many of these cases,
both federal actions and state actions removed to federal court, were consolidated for pre-trial purposes in a Multi-District
Litigation (MDL) in the United States District Court for the District of Massachusetts.
The plaintiffs in these cases included three 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. In June 2007, after a trial on the merits, the MDL Court dismissed the claims of two of the plaintiff classes
against the J&J AWP Defendants. In March 2011, the Court dismissed the claims of the third class against the J&J AWP
Defendants without prejudice.
AWP cases brought by various Attorneys General have proceeded to trial against other manufacturers. Several state
cases against certain subsidiaries of Johnson & Johnson have been settled, including the case in Alaska, which settled in
April 2014, and cases are still pending in Illinois, New Jersey, Wisconsin, Utah and Pennsylvania. The cases in Illinois, New
Jersey and Wisconsin have not yet proceeded to trial. In Utah, the claims brought by the Attorney General were dismissed
by the Court in 2013, but the State may appeal the dismissal after the conclusion of similar pending matters against other
defendants. The AWP case against the J&J AWP Defendants brought by the Attorney General of the Commonwealth of
Pennsylvania was tried in Commonwealth Court in 2010. The Court found in the Commonwealth’s favor with regard to
certain of its claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPL”), entered an
injunction, and awarded $45 million in restitution and $6.5 million in civil penalties. The Court found in the J&J AWP
Defendants’ favor on the Commonwealth’s claims of unjust enrichment, misrepresentation/fraud, civil conspiracy, and on
certain of the Commonwealth’s claims under the UTPL. The J&J AWP Defendants appealed the Commonwealth Court’s
UTPL ruling, and in June 2014, the Pennsylvania Supreme Court vacated the judgment entered by the Commonwealth
Court and remanded the case for further proceedings. On remand, in January 2015, the Commonwealth Court dismissed
the monetary awards against the J&J AWP Defendants, which may be appealed.
RISPERDAL®
In November 2013, Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, Inc. (JPI), finalized previously
disclosed settlement agreements with the United States Department of Justice and forty-five states resolving federal
investigations and state Medicaid claims related to past promotional practices of RISPERDAL®from 1999 through 2005,
and other matters. JPI had also settled alleged consumer fraud claims in connection with the sale and marketing of
RISPERDAL®with thirty-six states and the District of Columbia in September 2012. In addition to these actions, the
Attorneys General of several states brought actions against JPI, related to the sale and marketing of RISPERDAL®,
seeking one or more of the following remedies: reimbursement of Medicaid or other public funds for RISPERDAL®
prescriptions written for off-label use, compensation for treating their citizens for alleged adverse reactions to
RISPERDAL®, civil fines or penalties for violations of state false claims acts or consumer fraud statutes, punitive damages,
or other relief relating to alleged unfair business practices. Certain of these actions also sought injunctive relief relating to
the promotion of RISPERDAL®. Many of the actions and claims brought by the state Attorneys General have been settled,
either individually or as part of the settlements described above.
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