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Johnson and Johnson Hit with Recall Charges, Lowers 2012 Outlook

Johnson and Johnson Hit with Recall Charges, Lowers 2012 OutlookJohnson and Johnson saw charges of $3 billion in the fourth quarter of December, most of which were related to the recall of its defective artificial hips, which has led the company to give lower 2012 earnings forecasts than analysts expected.

According to Reuters, J&J's DePuy Orthopedics unit issued a massive recall in 2010, stating its "metal-on-metal" hip-replacement devices could shed metal fragments and cause disabling injuries.

Morningstar analyst Damien Conover predicted that "J&J is getting ready to offer some settlements" with patients who received the roughly 93,000 artificial hips. Fourth-quarter charges will allow the money to be allocated for patients and lawyers continually getting involved in product liability litigation.

The DePuy ASR devices were designed to be more durable than older implants that used metal and polyethylene for the ball-in-socket segment of the joint. However, Conover says the company's devices have a nearly 30 percent failure rate – three times higher than other metal-on-metal devices.

Gabelli & Co. analyst Jeff Jonas stated that the various fourth-quarter charges include $800 million for medical costs of the recall.

According to The Wall Street Journal, J&J reported an 89 percent drop in fourth-quarter profit due to the onslaught of legal settlements and product-liability costs. Aside from the hip-replacement charges, the company also faced allegations that it promoted the antipsychotic Risperdal for unapproved uses. In total, the charges totaled $2.9 billion in the fourth quarter.

Earlier in January, J&J settled a lawsuit in Texas for $158 million after claims were made that the company's improper marketing of Risperdal caused the state's Medicaid program to pay more for the drug than necessary.

J&J has also had problems with its Doxil drug, which is used to treat ovarian and other cancers. The drug has been in short supply since the middle of 2011, when problems arose at the company's contract manufacturer Ben Venue Laboratories. The company said a new supply of the drug from the Ben Venue facility may not be available until later in 2012. The problems led fourth-quarter U.S. sales of the drug to decline 82 percent to $10 million. 

Johnson and Johnson Suffers Financially After Hip Replacement Recall

Johnson and Johnson Suffers Financially After Hip Replacement RecallAfter recalling a hip replacement device manufactured by one of its subsidiary companies, Johnson & Johnson has experienced a decline in earnings, reports the Asbury Park Press.

The metal-on-metal hip device, made by DePuy Orthopaedics in Indiana, was recalled for failing at a higher than normal rate. According to the publication, the net income for Johnson and Johnson in the second quarter this year was $2.8 billion, down from $3.5 billion during the same period in 2010.

In addition to the recall, millions of dollars in litigation costs also hurt profits. The company was forced to pay $223 million for litigation in cases involving patients who had dealt with the faulty hip replacement product. One such lawsuit was filed on behalf of a benefits fund based in New Jersey and alleged that DePuy knew about the devices’ shortcomings for two years. The lawsuit also pointed to further surgeries necessary due to the debris generated by the metal device that could infiltrate surrounding body parts.

The hip replacement recall isn’t the only challenge facing the company. McNeil Consumer Healthcare, the plant producing its consumer products in Pennsylvania was recently shut down by the government because the facility was deemed deficient, reports the Philadelphia Inquirer.

As a result, the company is producing less over-the-counter products and turning less profit. In the first quarter of 2011, Johnson & Johnson experienced a 23.2 percent dip in profits from the same period a year earlier. The Pennsylvania plant is expected to continue production next year

Johnson & Johnson’s pharmaceutical division has also been cited for allegedly marketing medications for illnesses without gaining approval from the U.S. Food and Drug Administration to run those campaigns.

Risperdal Research and Gynecomastia

Recently, the American Association for Geriatric Psychiatry presented a study during their 2014 annual conference that confirms what many males have already experienced firsthand: Older men that take Risperdal have a nearly 70 percent chance of suffering male breast development, better known as gynecomastia, as opposed to men who have not been on the drug. Due to the results of this study, scientists are now recommending that physicians give their male patients Seroquel or Zyprexa rather than Risperdal to minimize their risks of experiencing gynecomastia, as well as the various other damaging effects of the drug.

The study’s researchers looked at data provided by the IMS LifeLink Health Plan claims database, which included information for one million males in the United States between 45 and 80 who filed claims between the years of 2001 and 2011. The researchers found 8,285 instances of gynecomastia among these men. Currently, the study is being reviewed for peer-reviewed journal publication, and researchers are starting to gather information that lets them investigate the prevalence of gynecomastia in teenage boys.

Risperdal: What Is It?

Risperdal is in a class of drugs called atypical antipsychotics. In recent years, these drugs have been most commonly prescribed for conditions like irritability, autism spectrum disorders, bi-polar, aggression, and behavior problems in both adults and children. It is believed that Risperdal causes gynecomastia in many men because it is a dopamine antagonist. When dopamine levels are low, the pituitary gland begins producing more prolactin, a sex hormone that is partly responsible for female breast growth and milk production. Even in women, the drug can result in spontaneous lactation and may also cause side effects that mimic the symptoms of pregnancy. In men, however, it can result in gynecomastia and lactation. Risperdal has also been shown to cause other health problems such as eye disorders, osteoporosis, diabetes, weight gain, headaches, and pancreatitis.

Lawsuits Regarding Risperdal

Risperdal’s manufacturer, Janssen Pharmaceuticals, a subsidiary of the Johnson & Johnson company, has received several dozen lawsuits from people who have experienced the negative effects of taking Risperdal. These suits claim that the drug’s manufacturer and their parent company neglected to perform sufficient studies on Risperdal’s long-term health effects on boys and failed to provide information on the serious risks associated with the drug prior to allowing it to be marketed for use in children.


Moldy Antipsychotics Means Yet Another Recall For Johnson & Johnson

Psych Central reports that Johnson & Johnson recently initiated a product recall on two of the company’s anti-psychotic medications known as Risperdal and Risperidone. Physicians and mental health practitioners often prescribe these medications for a variety of mental health related ailments including autism, bipolar disorder and schizophrenia. A spokesperson from the subsidiary of Ortho-McNeil -Janssen Pharmaceuticals reports that the medications may have been contaminated with chemicals used to preserve wood pallets.

The recall came to light after consumers reported noticing an unusual musty or mold like odor upon opening the medication bottles. After examining the suspected products, researchers at Johnson & Johnson determined that the odor originated from trace chemicals referred to as TBA or 2,4,6 trbromoanisole. Manufacturers often treat wood products with a preservative that combines with airborne bacteria or mold to create the offensive byproduct. The wood is then commonly used in constructing the pallets that the company uses to transport pharmaceutical products.

Inspectors worked in cooperation with suppliers to find the source of the TBA. The investigation revealed that pallets found in a warehouse provided by a supplier contained the chemical compound. Researchers discovered that packaging materials created by the pharmaceutical company came into direct contact with the pallets, which transferred the substance to the inside of medication bottles.

While the odor is not considered harmful, consumer reports have included minor gastrointestinal symptoms after taking the medication from the affected containers. The company reports that consumers have not experienced any serious or health threatening effects related to the contamination. Johnson & Johnson reports that two lots in particular were affected by exposure to TBA and were shipped to pharmacies between 8/2010 and 01/2011.

The company is asking consumers to check Risperdal bottles containing 60-3mg. tablets having the lot number #0GG904 and an expiration date of 05/2012. The other lot affected concerns the Risperidone bottles containing 60-2mg. tablets with a lot number #OIG175 and an expiration date listed as 08/2012. If in possession of medication meeting these qualifications, Johnson & Johnson advises that patients should not abruptly stop taking the medication or adverse reactions may occur.

If bottles exhibit an unusual odor, return the container to your pharmacy and receive another prescription. Patients may also contact a healthcare provider if having any questions concerning TBA or the affected medications. For more detailed information about TBA, refer to Studies indicate that since 2009, a number of healthcare and pharmaceutical company products have experienced contamination problems related to TBA.

Speedy End to Johnson & Johnson Dangerous Drug Trial – Settlement Undisclosed

On the first day of a trial set to take place in Philadelphia, Johnson and Johnson reached a settlement agreement over personal injury claims against the company and its antipsychotic drug, Risperdal.

The lawsuit brought to court by Aron Banks, 21, alleges that use of Risperdal caused the male plaintiff abnormal breast growth while taking the drug as a child. Banks was prescribed the drug from 2000 to 2004 at which time the drug was not approved for use in children. The terms of the settlement agreement are undisclosed.

Risperdal is produced by the Janssen unit of Johnson and Johnson and is used to treat the symptoms of schizophrenia, bipolar disorder and irritability in patients with autism. The drug was approved by the Food and Drug Administration (FDA) for use in the treatment of several psychotic disorders, including schizophrenia in 1993.

This lawsuit was the first of many claims to go to trial against Johnson and Johnson alleging that Risperdal caused breast growth in young boys. In fact, a similar trial begins at the end of September 2012, also in Philadelphia. It is reported that over 400 lawsuits are pending against Johnson and Johnson claiming that the Risperdal product caused personal injury to consumers.

Marketing Practices Under Scrutiny in Several States

However, Risperdal has been under scrutiny in the United States for many years. Since 2004, government agencies have been investigating the sales practices of the Risperdal unit. Allegations have been made that the company has been marketing the drug for unapproved medical uses in several states.

Last month Johnson and Johnson agreed to pay $181 million to settle claims in 36 states which alleged improper marketing and advertising practices regarding Risperdal and another antipsychotic drug, Invega. Prosecutors in several states have also alleged that J&J knowingly concealed or minimized the risks associated with taking Risperdal.

Earlier this year, a case in Texas which included claims that Janssen marketed Risperdal for children without regulatory approval for its use in this manner, was settled for $158 million. In addition, Johnson and Johnson settled Risperdal lawsuits in South Carolina for $327 million and in Louisiana for $258 million. Lawsuits also claim that the company made false or misleading claims about the safety of the drug and in some states accuse Johnson and Johnson of improperly trying to influence doctors to push the drug on patients.

These amounts, while large, are considered to be far less than the amounts Johnson and Johnson would have forced to pay in penalties and fines and for the costly appeals process, had it not settled. Johnson and Johnson has made billions from the sale of Risperdal.