Johnson & Johnson - Index

Johnson & Johnson - report - Index

the United States, infringes a number of Amgen patents concerning
EPO. Amgen licenses EPO for sale in the United States
to Ortho Biotech for non-dialysis indications. Trial in this action
concluded in October with a verdict in Amgen’s favor. Roche is
expected to appeal.
In late December 2005 and early 2006, three purported
class actions were filed on behalf of purchasers of endo-mechanical
instruments against the Company and its wholly-owned
subsidiaries, Ethicon, Inc., Ethicon Endo-Surgery, Inc., and
Johnson & Johnson Health Care Systems, Inc. These challenge
suture and endo-mechanical contracts with Group Purchasing
Organizations and hospitals, in which discounts are predicated
on a hospital achieving specified market share targets for both
categories of products. These actions have been filed in the Federal
District Court for the Central District of California.
In February 2006, Johnson & Johnson received a subpoena
from the U.S. Securities & Exchange Commission (SEC) requesting
documents 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 June 2006, DePuy received a subpoena from the DOJ’s
Antitrust Division, requesting documents related to the manufacture,
marketing and sale of orthopaedic devices, and had
search warrants executed in connection with the investigation.
DePuy has responded to the request for documents. In the wake
of publicity about the subpoena, DePuy was served with five civil
antitrust class actions. All of those cases have been dismissed
without prejudice to the right to file them in the future.
In September 2006, Janssen received a subpoena from the
Attorney General of the State of California seeking documents
regarding sales and marketing and side-effects of RISPERDAL®,
as well as interactions with State officials regarding the State’s
formulary for Medicaid-reimbursed drugs. Janssen has responded
to the subpoena.
In November 2006, Centocor received a subpoena seeking
documents in connection with an investigation being conducted
by the Office of the United States Attorney for the Central
District of California regarding Centocor’s Average Selling Price
(ASP) calculations for REMICADE® under the company’s
Contract Purchase Program. Centocor produced material
responsive to the subpoena. Centocor has been advised that
this investigation has been closed.
In February 2007, Johnson & Johnson 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 payments may fall within the jurisdiction of the
Foreign Corrupt Practices Act (FCPA). In the course of continuing
dialogues with the agencies, other issues potentially rising to the
level of FCPA violations in additional markets have been brought
to the attention of the agencies by the Company. The Company
has provided and will continue to provide additional information
to DOJ and SEC, and will cooperate with the agencies’ reviews of
these matters.
In March 2007, Cordis received a letter request for documents
from the Committee on Oversight and Government
Reform of the U.S. House of Representatives regarding marketing
and safety of drug-eluting stents. Cordis is cooperating in
responding to the request.
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, TOPAMAX® by Ortho-McNeil
and NATRECOR® by Scios. The subpoenas request information
regarding the Company’s corporate supervision and oversight of
these three subsidiaries, including their sales and marketing of
these drugs. The Company is cooperating in responding to these
requests. In addition, the U.S. Attorney’s office in Boston has
issued subpoenas to several employees of Johnson & Johnson.
In March 2007, the Company received a letter from the
Committee on Energy and Commerce of the U.S. House of
Representatives seeking answers to several questions regarding
marketing and safety of PROCRIT®, the erythropoietin product
sold by Ortho-Biotech. In May 2007, Senator Grassley, the ranking
member of the United States Senate Committee on Finance,
sent the Company a letter seeking information relating to
PROCRIT®. The Company provided its initial response in July
2007. In May 2007, the New York State Attorney General issued
a subpoena seeking information relating to PROCRIT®. Like the
House and Senate requests, the subpoena asks for materials
relating to PROCRIT® safety, marketing and pricing. 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
subpoenas seek documents and information relating to nominal
pricing agreements. For purposes of the subpoenas, nominal
pricing agreements 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 is responding to the subpoenas and will
cooperate with the inquiry.
In August 2007, the Company received a request for documents
and interviews of witnesses from the Committee on
Energy and Commerce of the U.S. House of Representatives concerning
GMP (Good Manufacturing Practice) issues involving
the CYPHER® Stent. The letter states that FDA inspectors in
2003 identified “numerous systemic violations” of GMP’s in
connection with CYPHER® manufacturing but nonetheless
allowed Cordis to continue marketing CYPHER® Stents. Cordis
is cooperating in responding to this request.
In October 2007, the Company received a request for documents
from Senator Grassley on behalf of the Committee on
Finance of the U.S. Senate concerning continuing medical education
payments to specific physicians. The Company is in the
process of complying with the request.
In December 2007, the Company and its subsidiary
Janssen received a request from Senator Grassley on behalf of
the Committee on Finance of the U.S. Senate for documents
and information concerning the marketing and promotion of
RISPERDAL® for use by nursing home patients. The companies
are in the process of collecting responsive documents and
obtaining the relevant information.
With respect to all the above matters, the Company and its
subsidiaries are vigorously contesting the allegations asserted
against them and otherwise pursuing defenses to maximize the
prospect of success. The Company and its subsidiaries involved
in these matters continually evaluate their strategies in managing
these matters and, where appropriate, pursue settlements
NOTES TO CONSOLIDA TED FINANCIAL ST A TEMENTS 71