Johnson and Johnson 2008 Annual Report Download - page 68

In September 2006, Janssen (now OMJPI) received a sub-
poena from the Attorney General of the State of California seeking
documents regarding sales and marketing and side-effects of
RISPERDAL®, as well as interactions with State officials regarding
the State’s formulary for Medicaid-reimbursed drugs. Janssen (now
OMJPI) has responded to the subpoena.
In February 2007, Johnson & Johnson voluntarily disclosed
to the DOJ and the SEC that subsidiaries outside the United States
are believed to have made improper payments in connection with
the sale of medical devices in two small-market countries, which
payments may fall within the jurisdiction of the Foreign Corrupt
Practices Act (FCPA). In the course of continuing dialogues with the
agencies, other issues potentially rising to the level of FCPA viola-
tions in additional markets have been brought to the attention of the
agencies by the Company. The Company has provided and will con-
tinue to provide additional information to DOJ and SEC, and will
cooperate with the agencies’ reviews of these matters. Law enforce-
ment agencies of a number of other countries are also pursuing
investigations of matters voluntarily disclosed by the Company to
DOJ and SEC. Discussions are underway in an effort to resolve these
matters, and the Iraq Oil for Food matter referenced above, but
whether agreement can be reached and on what terms is uncertain.
In March 2007, the Company received separate subpoenas
from the U.S. Attorney’s Office in Philadelphia, the U.S. Attorney’s
Office in Boston and the U.S. Attorney’s Office in San Francisco. The
subpoenas relate toinvestigations by these three offices referenced
above concerning, respectively, sales and marketing of RISPERDAL®
byJanssen (nowOMJPI), TOPAMAX® by Ortho-McNeil (now
OMJPI) and NATRECOR® by Scios. The subpoenas request informa-
tion regarding the Company’s corporate supervision and oversight
of these three subsidiaries, including their sales and marketing of
these drugs. The Company responded to these requests. In addition,
the U.S. Attorney’s office in Boston has issued subpoenas for grand
jury testimony to several employees of Johnson & Johnson.
In May2007, the New York State Attorney General issued a
subpoena seeking information relating to the marketing and safety
of PROCRIT®. The Company is responding to these requests.
In April 2007,the Companyreceived two subpoenas from
the Office of the Attorney General of the State of Delaware. The
subpoenas seek documents and information relating to nominal
pricing agreements. For purposes of the subpoenas, nominal pricing
agreements are defined as agreements under which the Company
agreed to provide a pharmaceutical product for less than ten
percent of the Average Manufacturer Price for the product. The
Company responded to these requests.
In January 2008, the European Commission (“EC”) began an
industry-wide antitrust inquiry concerning competitive conditions
within the pharmaceutical sector. Because this is a sector inquiry, it
is not based on any specific allegation that the Company has vio-
lated EC competition law. The inquiry began with unannounced
raids of a substantial number of pharmaceutical companies
throughout Europe, including Johnson & Johnson affiliates. In March
2008, the EC issued detailed questionnaires to approximately 100
companies, including Johnson & Johnson affiliates. In November
2008, the EC issued a preliminary report summarizing its findings.
The final report is expected in June or July of 2009.
In March 2008, the Company received a letter request from
the Attorney General of the State of Michigan. The request seeks
documents and information relating to nominal price transactions.
The Company is responding to the request and will cooperate with
the inquiry.
In June 2008, Johnson & Johnson received a subpoena from
the United States Attorneys Office for the District of Massachusetts
relating to the marketing of biliary stents by the Company’s Cordis
subsidiary. Cordis is cooperating in responding to the subpoena.
In September 2008, Multilan AG, an indirect subsidiary of
Schering-Plough Corporation, commenced arbitration against
Janssen Pharmaceutica NV for an alleged wrongful termination of
an agreement relating to payments in connection with termination
of certain marketing rights. Multilan seeks declaratory relief,
specific performance and damages. Multilan alleges that damages
exceed €700 million. The parties are in the process of selecting
an arbitral tribunal.
In recent years the Company has received numerous requests
from a variety of United States Congressional Committees to pro-
duce information relevant to ongoing congressional inquiries. It is
the Company’s policy to cooperate with these inquiries by produc-
ing the requested information.
With respect to all the above matters, the Company and its
subsidiaries are vigorously contesting the allegations asserted
against them and otherwise pursuing defenses to maximize the
prospect of success. The Company and its subsidiaries involved in
these matters continually evaluate their strategies in managing
these mattersand, whereappropriate, pursue settlements and other
resolutions where those are in the best interest of the Company.
The Company is also involved in a number of other patent,
trademark and other lawsuits incidental toits business. The ulti-
mate legal and financial liability of the Company in respect to all
claims, lawsuits and proceedings referred to above cannot be esti-
mated with any certainty. However, in the Company’s opinion, based
on its examination of these matters, its experience to date and dis-
cussions with counsel, the ultimate outcome of legal proceedings,
net of liabilities accrued in the Company’s balance sheet, is not
expected tohave a material adverse effect on the Company’s finan-
cial condition, although the resolution in any reporting period of one
or more of these matters could have a significant impact on the
Company’s results of operations and cash flows for that period.
66 JOHNSON & JOHNSON 2008 ANNUAL REPORT