Johnson and Johnson 2012 Annual Report Download - page 71

intervened in both of these cases, naming Johnson & Johnson, Ortho-McNeil-Janssen Pharmaceuticals, Inc. (now Janssen
Pharmaceuticals, Inc. (JPI)), and Johnson & Johnson Health Care Systems Inc. as defendants. Subsequently, the
Commonwealth of Massachusetts, Virginia, and Kentucky, and the States of California and Indiana intervened in the
action. In February 2011, the United States District Court for the District of Massachusetts dismissed one qui tam case
entirely and dismissed the other case in part, rejecting allegations that the defendants had violated their obligation to
report its “best price” to health care program officials. The claims of the United States and individual states remain
pending. In June 2012, the parties were granted their joint motion to stay the case pending resolution of the potential
settlement discussed in the RISPERDAL®section above.
In November 2005, a lawsuit was filed by Scott Bartz, a former employee, in the United States District Court for the
Eastern District of Pennsylvania against Johnson & Johnson and certain of its pharmaceutical subsidiaries (the J&J
Defendants), along with co-defendants McKesson Corporation (McKesson) and Omnicare, Inc. In February 2011, the
plaintiff filed an amended complaint. Thereafter, on the J&J Defendants’ motion, the case was transferred to the United
States District Court for the District of Massachusetts, where it is currently pending. The amended complaint alleges a
variety of causes of action under the Federal False Claims Act and corresponding state and local statutes, including that
the J&J Defendants engaged in various improper transactions that were allegedly designed to report false prescription
drug prices to the federal government in order to reduce the J&J Defendants’ Medicaid rebate obligations. The complaint
further alleges that the J&J Defendants improperly retaliated against the plaintiff for having raised these allegations
internally. Bartz seeks multiple forms of relief, including damages and reinstatement to a position with the same seniority
status. The J&J Defendants subsequently moved to dismiss the complaint in May 2011. In March 2012, the District Court
dismissed Bartz’s claims under the Federal False Claims Act, and declined to exercise supplemental jurisdiction over
numerous related claims under state false claims act statutes. The District Court, however, denied the dismissal motion
with regard to Bartz’s claims that he was retaliated against in violation of the Federal False Claims Act and in violation of
New Jersey’s Conscientious Employee Protection Act. In February 2013, the parties entered into a settlement agreement
to resolve all of Bartz’s claims and filed a joint motion to dismiss the lawsuit, with prejudice; the District Court granted the
motion to dismiss all claims.
MCNEIL CONSUMER HEALTHCARE
Starting in June 2010, McNeil Consumer Healthcare Division of McNEIL-PPC, Inc. (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. The Companies are cooperating with the United States Attorney’s Office in responding to these subpoenas.
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. 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. In December 2012, Oregon filed a Notice of Appeal in the Court of Appeals of the State of
Oregon.
In March 2011, the United States filed a complaint for injunctive relief in the United States District Court for the Eastern
District of Pennsylvania against McNEIL-PPC and two of its employees, alleging that McNEIL-PPC is in violation of FDA
regulations regarding the manufacture of drugs at the facilities it operates in Lancaster, Pennsylvania, Fort Washington,
Pennsylvania, and Las Piedras, Puerto Rico. On the same day, the parties filed a consent decree of permanent injunction
resolving the claims set forth in the complaint. The Court approved and entered the consent decree on March 16, 2011.
The consent decree, which is subject to ongoing enforcement by the Court, requires McNEIL-PPC to take enhanced
measures to remediate the three facilities. The Fort Washington facility, which was voluntarily shut down in April 2010, will
remain shut down until a third-party consultant certifies that its operations will be in compliance with applicable law, and
the FDA concurs with the third-party certification. The Lancaster and Las Piedras facilities may continue to manufacture
and distribute drugs, provided that a third party reviews manufacturing records for selected batches of drugs released
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