Johnson & Johnson revealed last week that it intends on providing more corporate oversight of its drug manufacturing and marketing practices. J&J made these promises to resolve investor lawsuits claiming J&J executives ignored bad and harmful practices.
Specifically, the company has agreed to create a board-level group to ensure its subsidiaries' compliance with federal regulations. The company has also agreed to adopt a revised risk management policy.
These measures will be part of J&J's settlement of claims filed against J&J executives in federal court in New Jersey. Included in the allegations against J&J are claims that it mis-marketed its antipsychotic drug, Risperdal.
J&J allegedly is in talks for a $2.2 billion settlement to resolve claims against it regarding Risperdal and other drugs. Concern over Risperdal marketing began in 2004. The allegations include J&J's marketing of the drug for off-label, unapproved uses. J&J recently disclosed in August that it agreed to a settlement for a misdemeanor criminal charge relating to Risperdal marketing.
The investor suit began in 2010 when investors brought derivative claims against directors alleging they ignored "red flags" of the company's marketing and production practices for Risperdal and other drugs, which led to recalls. Although derivative suits are based on financial losses, rather than injuries, they too shed light on the bad conduct that drug companies continuously engage in for profit. Reports estimate over 40 of J&J's products were recalled in 2010 because of contamination and incorrect labeling.
According to shareholder's, J&J's decentralized corporate setup allows its subsidiaries (often manufacturing plants) to operate without oversight from corporate headquarters. This allows violations to go unnoticed. Thus, one of the changes the company has agreed to make involves a committee of "independent directors" who will produce an annual report to shareholders indicating the company's regulatory compliance.
As more information surfaces, we will be sure to update you. Corporate accountability is certainly a step in the right direction, but the fact it's only occurring because of a wave of lawsuits is troubling. The dangerous drug lawyers at JONES WARD handle a variety of defective drug cases. If you or a loved one has been injured, please give us a call. For more information, contact attorney A. Layne Stackhouse at 502.882.6000 or email@example.com.