On April 30th, Johnson & Johnson faced a recall of more than 136 million bottles of pediatric Tylenol, Motrin, Benadryl and Zyrtec due to manufacturing problems. While so far investigators haven’t linked the defects in the medication to any health problems, the U.S. Food and Drug Administration said the division of the company responsible for quality control at the Pennsylvania-based plant, McNeil Consumer Healthcare, had a pattern of violations and delayed reporting of problems to the FDA.
While Johnson & Johnson’s troubles have drawn less attention than those of companies like BP and Toyota Motor Corp., the company is facing legal problems on several fronts. Two class actions have been filed against the McNeil division – one in the Northern District of Illinois and the other in the Eastern District of Pennsylvania – trying to force it to broaden the recall and offer cash refunds instead of coupons for new products. Shareholders filed suit against Johnson & Johnson in New Jersey, alleging that the company breached its good-faith duty by failing to act after the FDA had expressed earlier concerns about quality control and manufacturing practices at the plant.
Meanwhile, the FDA is considering criminal penalties against McNeil. The House Committee on Oversight and Government Reform, which has held a hearing on the recalls, is still checking into the issue. Edolphus Towns, (D-NY), the Committee Chair, plans to introduce legislation giving the FDA mandatory recall authority. But getting much done involving drug companies in Congress is never easy. Johnson & Johnson has a steady roster of Washington lobbyists. The company’s lobbying expenses were $2.1 million in the first quarter of 2010, before the recall, and nearly $6.4 million in 2009. Its Washington office includes 14 in-house registered lobbyists. Eleven outside lobbying firms have registered Johnson & Johnson as a client, including some of the real heavy weights. All of these lobbyists are being paid very well.
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