Johnson and Johnson 2009 Annual Report Download - page 64

2010, the government filed a complaint intervening in the cases.
The complaint asserts claims under the federal False Claims Act and
a related state law claim in connection with the marketing of several
drugs to Omnicare.
In November 2005, Amgen Inc. (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 con-
cerning 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 judge issued a prelimi-
nary injunction blocking the CERA launch, and subsequently made
the injunction permanent. The Federal Circuit upheld the entry of a
permanent injunction. This matter has been settled pursuant to an
agreement between the parties.
In February 2006, the Company 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.
In February 2007, the Company 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 pay-
ments may fall within the jurisdiction of the Foreign Corrupt Prac-
tices 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 the 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
the 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 to investigations by these three offices referenced
above concerning, respectively, sales and marketing of RISPERDAL®
by Janssen (now OMJPI), 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 May 2007, 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 Company received two subpoenas from the
Office of the Attorney General of the State of Delaware. The sub-
poenas seek documents and information relating to nominal pricing
agreements. For purposes of the subpoenas, nominal pricing agree-
ments 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
violated 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 was issued on July 8, 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 responded to the request and will cooperate with the
inquiry.
In June 2008, the Company received a subpoena from the
United States Attorney’s 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 (Multilan), an indirect sub-
sidiary of Schering-Plough Corporation, commenced arbitration
against Janssen Pharmaceutica NV for an alleged wrongful termina-
tion of an agreement relating to payments in connection with termi-
nation of certain marketing rights. Multilan seeks declaratory relief,
specific performance and damages. This case was recently settled
and a charge was recorded to other income (expense), net, in the
fiscal fourth quarter of 2009.
In February 2009, Basilea Pharmaceutica AG (Basilea) brought
an arbitration against the Company and various affiliates alleging
that the Company breached the 2005 License Agreement for cefto-
biprole by, among other things, failing to secure FDA approval of the
cSSSI (skin) indication and allegedly failing to properly develop the
pneumonia indication. Basilea is seeking to recover damages and a
declaration that the Company materially breached the agreement.
This matter has been scheduled for an arbitration hearing com-
mencing in June 2010 followed by post-trial submissions.
In April 2009, the Company received a HIPPA subpoena
from the U.S. Attorney’s Office for the District of Massachusetts
(Boston) seeking information regarding the Company’s financial
relationship with several psychiatrists. The Company is responding
to this request.
In April 2009, Ortho-Clinical Diagnostics, Inc. (OCD) received
a grand jury subpoena from the U.S. Department of Justice,
Antitrust Division, requesting documents and information for the
period beginning September 1, 2000 through the present, pertaining
to an investigation of alleged violations of the antitrust laws in the
blood reagents industry. The Company is in the process of comply-
ing with the subpoena. In the weeks following the public announce-
ment that OCD had received a subpoena from the Antitrust
Division, multiple class action complaints were filed. The various
cases were consolidated for pre-trial purposes in the Eastern
District of Pennsylvania.
In May 2009, the New Jersey Attorney General issued a sub-
poena to DePuy Orthopaedics, Inc., seeking information regarding
the financial interest of clinical investigators who performed clinical
studies for DePuy Orthopaedics, Inc. and DePuy Spine, Inc. The
Company is responding to these requests.
In May 2009, COBI commenced an arbitration proceeding
before the American Arbitration Association against Schering-
Plough Corporation and its subsidiary Schering-Plough (Ireland)
Company (collectively, Schering-Plough). COBI and Schering-
Plough are parties to a series of agreements (the Distribution
62 J O H N S O N & J O H N S O N 2 0 0 9 A N N U A L R E P O R T