Johnson and Johnson 2008 Annual Report Download - page 67

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 indi-
viduals who made co-payments for physician-administered drugs
covered by Medicare (“Class 1”). A trial of the two Massachusetts-
only class actions concluded before the MDL Court in December
2006. In June 2007, the MDL Court issued post-trial rulings, dismiss-
ing the Johnson & Johnson defendants from the case regarding all
claims of Classes 2 and 3, and subsequently of Class 1 as well. The
ruling is the subject of a pending appeal. AWP cases brought by
various Attorneys General have proceeded to trial against other
manufacturers. Cases including Johnson & Johnson subsidiaries are
expected to be set for trial in 2009 and 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
Companyand Centocor have responded to these requests for
documents and information.
In December 2003, Ortho-McNeil (nowOMJPI) 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 Officeof 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 these subpoenas.
In September 2004, Ortho Biotech Inc. (now COBI), received
a subpoena from the U.S. Office of Inspector General’s Denver,
Colorado field office seeking documents directed to the sales and
marketing of PROCRIT® (Epoetin alfa) from 1997 tothe present, as
well as to dealings with U.S. Oncology Inc., a healthcare services
network for oncologists. Ortho Biotech (now COBI) has responded
tothe 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. Plaintiffsseek 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.
Plaintiffssought toappeal these decisions and, in April 2008, the
Court of Appeals ruled that plaintiffs’ appeal of the denial of class
certification was untimely. Plaintiffs are now engaged in further
discovery of individual plaintiffs’ claims.
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 contractual 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 include an 18-month
Deferred Prosecution Agreement (DPA), acceptance by each com-
pany of a monitor 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. In November 2007, the Attorney Gen-
eral of the Commonwealth of Massachusetts issued a civil inves-
tigative demand to DePuy seeking information regarding financial
relationships between a number of Massachusetts-based orthope-
dic surgeons and providers and DePuy, which relationships had
been publicly disclosed by DePuy pursuant to the DPA. In February
2008, DePuy received a written request for information from the
U.S. Senate Special Committee on Aging, as a follow-up to earlier
inquiries, concerning a number of aspects of the DPA.
In July 2005, Scios Inc. (Scios), a Johnson & Johnson sub-
sidiary, received a subpoena from the U.S. Attorney’s Office, District
of Massachusetts, seeking documents related tothe sales and mar-
keting of NATRECOR®. Scios is responding to the subpoena. In early
August 2005, Scios was advised that the investigation would be
handled bythe U.S. Attorney’sOffice for the Northern District of
California in San Francisco. Additional requests for documents have
been received and responded to and former and current Scios
employees have testified before a grand jury in San Francisco.
In September 2005, Johnson & Johnson received a subpoena
from the U.S. Attorney’s Office, District of Massachusetts, seeking
documents related tosales and marketing of eight drugs to Omni-
care, Inc., a manager of pharmaceutical benefits for long-term care
facilities. 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 November 2005, Amgen filed suit against Hoffmann-
LaRoche, Inc. (Roche) in the U.S. District Court for the District of
Massachusetts seeking a declaration that the Roche product CERA,
which Roche has indicated it would seek to introduce into the
United States, infringes a number of Amgen patents concerning
EPO. Amgen licenses EPO for sale in the United States to Ortho
Biotech (now COBI) for non-dialysis indications. Trial in this action
concluded in October 2007 with a verdict in Amgen’s favor, finding
the patents valid and infringed. The judgeissued a preliminary
injunction blocking the CERA launch, but said he was considering
modifying that injunction to grant Roche a compulsory license that
would allowit to launch in the U.S. if it paid a 22.5 percent royalty.
In a subsequent decision, the district judge indicated he would not
grant Roche a compulsory license.
In February 2006, Johnson & Johnson received a subpoena from
the U.S. Securities & Exchange Commission (SEC) requesting docu-
ments relating to the participation by several Johnson & Johnson
subsidiaries in the United Nations Iraq Oil for Food Program. The
subsidiaries are cooperating with the SEC and U.S. Department of
Justice (DOJ) in producing responsive documents.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 65