Johnson and Johnson 2015 Annual Report Download - page 86

interest. In the first fiscal quarter of 2015, the Company accrued $136 million. In March 2015, JPI filed a Petition for
Rehearing. In July 2015, the South Carolina Supreme Court granted the Petition and filed a substituted opinion. The new
opinion reduced the judgment from approximately $136 million to approximately $124 million. In January 2016, the United
States Supreme Court denied JPI’s request for review, putting an end to this case.
In April 2012, in the lawsuit brought by the Attorney General of Arkansas, the jury found against both JPI and Johnson &
Johnson, and the Court imposed penalties in the amount of approximately $1.2 billion. In January 2013, the trial court
awarded attorney fees of approximately $181 million. JPI and Johnson & Johnson appealed both awards to the Arkansas
Supreme Court, and in March 2014, the Arkansas Supreme Court dismissed the State’s claim under the Arkansas
Medicaid Fraud False Claims Act, as well as the approximately $1.2 billion in penalties, and reversed and remanded a
claim under the Arkansas Deceptive Trade Practices Act. In April 2014, the Arkansas Supreme Court rejected a petition
by the State for rehearing on the case. In May 2015, the matter settled for $7.75 million.
McNeil Consumer Healthcare
Starting in June 2010, McNeil Consumer Healthcare Division of McNEIL-PPC, Inc. (now Johnson & Johnson Consumer
Inc., McNeil Consumer Healthcare Division) (McNeil Consumer Healthcare) and certain affiliates, including Johnson &
Johnson (the Companies), received grand jury subpoenas from the United States Attorney’s Office for the Eastern District
of Pennsylvania requesting documents broadly relating to recalls of various products of McNeil Consumer Healthcare, and
the FDA inspections of the Fort Washington, Pennsylvania and Lancaster, Pennsylvania manufacturing facilities, as well as
certain documents relating to recalls of a small number of products of other subsidiaries. In addition, in February 2011, the
government served McNEIL-PPC, Inc. (McNEIL-PPC) with a Civil Investigative Demand seeking records relevant to its
investigation to determine if there was a violation of the Federal False Claims Act. In March 2015, McNEIL-PPC entered a
guilty plea in the United States District Court for the Eastern District of Pennsylvania to a misdemeanor violation of the
U.S. Food, Drug and Cosmetic Act. McNEIL- PPC agreed to pay a $20 million fine and a $5 million forfeiture to resolve
the matter.
The Companies have also received Civil Investigative Demands from multiple State Attorneys General Offices broadly
relating to the McNeil recall issues. The Companies continue to cooperate with these inquiries, which are being
coordinated through a multi-state coalition. If a resolution cannot be reached with this multi-state coalition, it is possible
that individual State Attorneys General Offices may file civil monetary claims against the Companies. In January 2011, the
Oregon Attorney General filed a civil complaint against Johnson & Johnson, McNEIL-PPC and McNeil Healthcare LLC in
state court alleging civil violations of the Oregon Unlawful Trade Practices Act relating to an earlier recall of a McNeil OTC
product. In November 2012, the state court granted a motion by the Companies to dismiss Oregon’s complaint in its
entirety, with prejudice, and Oregon appealed that decision. In November 2015, the Court of Appeals of the State of
Oregon reversed the trial court and reinstated Oregon’s consumer protection claims. In December 2015, the Companies
filed a petition for review with the Oregon Supreme Court.
Opioids Litigation
Along with other pharmaceutical companies, Johnson & Johnson (J&J) and Janssen Pharmaceuticals, Inc. (JPI) have been
named in two lawsuits alleging claims related to marketing of opioids, including DURAGESIC®, NUCYNTA®and
NUCYNTA®ER. In May 2014, Santa Clara and Orange Counties in California (the Counties) filed a complaint in state
court in Orange County, California against numerous pharmaceutical manufacturers, including J&J and JPI, alleging claims
related to opioid marketing practices, including false advertising, unfair competition, and public nuisance. The Counties
seek injunctive and monetary relief. In February 2015, the defendants filed motions challenging the sufficiency of the
complaint. In August 2015, the Court stayed the case until the FDA concludes its ongoing inquiry into the safety and
effectiveness of long-term opioid treatment.
In June 2014, the City of Chicago filed a complaint in Cook County Circuit Court against the same group of
pharmaceutical manufacturers, including J&J and JPI, alleging a number of claims related to opioid marketing practices,
including consumer fraud violations and false claims, and seeking injunctive and monetary relief. The case was later
removed to the United States District Court for the Northern District of Illinois, and in December 2014, J&J and JPI filed a
motion to dismiss the City of Chicago’s First Amended Complaint for failure to state a claim. In November 2015, J&J and
JPI filed a motion to dismiss the City of Chicago’s Second Amended Complaint for failure to state a claim.
In September 2014, the Tennessee Attorney General Division of Consumer Affairs issued a Request for Information to JPI
and other pharmaceutical companies related to opioids marketing practices.
74 •Johnson & Johnson 2015 Annual Report