Johnson & Johnson’s Fall from Grace
Slapped with a $70 million fine to settle bribery and kickback charges, things have gone from bad to worse for Johnson & Johnson, one of the world’s premiere drug and medical device manufacturers. This latest fiasco comes on the heels of a slew of drug recalls and increasing litigation over defective medical devices—all occurring within the past year. Johnson & Johnson is literally falling apart at the seams. On April 8, 2011, the company agreed to settle civil and criminal charges with the U.S. Securities and Exchange Commission and the Justice Department for bribing foreign doctors to use its surgical implants (including the recalled DePuy ASR hip replacements) and drugs, as well as paying kickbacks to Iraq in exchange for 19 contracts under the United Nations’ Oil-for-Food Program. Will this downward spiral continue? Federal supervision following numerous recalls and the prospect of paying billions in damages to victims implanted with defective DePuy ASR hips has left many wondering whether the pharmaceutical giant will be able to dig itself out of this mess.