Johnson and Johnson 2006 Annual Report Download - page 74

72 JOHNSON & JOHNSON 2006 ANNUAL REPORT
In the action against Impax involving its ANDA referencing
McNeil-PPC’s product CONCERTA®, McNeil and ALZA Corpo-
ration, both subsidiaries of the Company, dismissed with preju-
dice their claim of infringement against Impax with respect to
itsANDA.
With respect to all of the above matters, the Johnson &
Johnson subsidiary involved is vigorously defending the validity
and enforceability and asserting the infringement of its own or
itslicensor’s patents.
AVERAGE WHOLESALE PRICE (AWP) LITIGATION
Johnson & Johnson and several of its pharmaceutical sub-
sidiaries, 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. Most of these cases, both federal actions
and state actions removed to federal court, have been consoli-
dated for pre-trial purposes 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 pay-
ments for the drugs at issue based on AWP. In the MDL proceed-
ing in Boston, plaintiffs moved for class certification of all or
some portion of their claims. On August 16, 2005, the trial judge
certified Massachusetts-only classes of private insurers provid-
ing “Medi-gap” insurance coverage and private payers for physi-
cian-administered drugs where payments were based on AWP.
The judge also allowed plaintiffs to file a new complaint seeking
to name proper parties to represent a national class of individu-
als who made co-payments for physician-administered drugs
covered by Medicare. The Court of Appeals declined to allow an
appeal of those issues and in January 2006, the court certified
the national class as noted above. A trial of the two Massachu-
setts-only class actions concluded before the Massachusetts
District Court in December 2006. A decision is expected in the
first quarter of 2007. The trial judge has scheduled jury trials to
begin in April 2007 in the national class action on behalf of
individuals who paid co-payments for Medicare Part B drugs.
Trial in the action brought by the Attorney General of the State of
Alabama making allegations related to AWP is set for November
2007. Additional AWP cases brought by various Attorney Gen-
erals are expected to be set for trial in 2008.
OTHER
In July 2003, Centocor Corporation 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 various Centocor market-
ing practices. Subsequent requests for documents have been
received from the U.S. Attorney’s Office. Both the Company and
Centocor responded, or are in the process of responding, to
these requests for documents and information.
In December 2003, Ortho-McNeil received a subpoena from
the U.S. Attorney’s Office in Boston, Massachusetts seeking docu-
ments relating to the marketing, including alleged off-label market-
ing, of the drug TOPAMAX®(topiramate). An additional subpoena
for documents was served in June 2006. Ortho-McNeil is cooper-
ating in responding to the subpoenas. In October 2004, the U.S.
Attorney’s Office in Boston asked attorneys for Ortho-McNeil to
cooperate in facilitating the subpoenaed testimony of several
present and former Ortho-McNeil employees before a federal
grand jury in Boston. Cooperation in securing the testimony of
additional witnesses before the grand jury has been requested
and is being provided.
In January 2004, Janssen received a subpoena from the
Office of the Inspector General of the U.S. Office of Personnel
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 marketing of and adverse reactions to
RISPERDAL®was received from the U.S. Attorney’s Office for the
Eastern District of Pennsylvania in November 2005. Janssen is
cooperating in responding to these subpoenas.
In April 2004, several of the Company’s pharmaceutical
companies were requested to submit information to the U.S.
Senate Finance Committee on their use of the “nominal pricing
exception” in calculating Best Price under the Medicaid Rebate
Program. This request was sent to manufacturers for the top
twenty drugs reimbursed under the Medicaid Program. The
Company’s pharmaceutical companies have responded to the
request. In February 2005 a request for supplemental informa-
tion was received from the Senate Finance Committee, which has
been responded to by the Company’s pharmaceutical companies.
In August 2004, Johnson & Johnson Health Care Systems,
Inc. (HCS), a Johnson & Johnson subsidiary, received a subpoena
from the Dallas, Texas U.S. Attorney’s Office seeking documents
relating to the relationships between the group purchasing
organization Novation and HCS and other Johnson & Johnson
subsidiaries. The Company’s subsidiaries involved have
responded to the subpoena.
In September 2004, Ortho Biotech Inc. (Ortho Biotech),
received a subpoena from the U.S. Office of Inspector General’s
Denver, Colorado field office seeking documents directed to
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 has
responded to the subpoena.