Not a good week for Johnson & Johnson, a company long considered by many to be a good example of corporate social responsibility. Earlier this week, the company expanded their recall of Tylenol and other products, but only after an FDA investigation revealed numerous problems that one of the company’s facilities. Now, the company is accused of paying kickbacks to nursing homes, in order to boost the use of a schizophrenia drug. Read the article here.
TRENTON, N.J. — Federal prosecutors said Friday that health care giant Johnson & Johnson paid tens of millions of dollars in kickbacks so nursing homes would put more patients on its blockbuster schizophrenia medicine and other drugs.
In a complaint filed Friday, prosecutors said J&J paid rebates and other forms of kickbacks to Omnicare Inc., the country’s biggest dispenser of prescription drugs in nursing homes. Prosecutors allege Omnicare pharmacists then recommended that nursing home patients with signs of Alzheimer’s disease be put on the powerful schizophrenia drug Risperdal, which was later found to increase risk of death in the elderly.
The allegations are in a complaint filed by the U.S. Attorney in Boston, whose office has joined two whistle-blower cases. One was filed in 2003 by a former Omnicare pharmacist in Chicago, Bernard Lisitza, who alleges he was fired after he challenged the Risperdal kickbacks and other improper practices at the company. The other was filed by former Omnicare financial analyst David Kammerer in 2005, after he resigned from the company.
Read more… The New York Times also has an article here.
Johnson & Johnson has long been lauded as a champion of corporate social responsibility. Their handing of the 1982 Tylenol recall has been used as a case study for the proper management of a company in crisis. (Just google “Johnson & Johnson Tylenol case study” – a good example of which is located here.) This time, the company appears to have handled the situation differently. Read the article here.
In a moment of startling corporate clarity, Johnson & Johnson recalled all its Tylenol from US store shelves in 1982 after capsules tampered with in Chicago were linked to six fatalities.
The move cost the company $100 million and threatened to decimate its leading share of the market. Instead, consumers applauded the company’s openness and sales rebounded within a year. Three decades later, the move is still regarded as a shining example of corporate social responsibility.
The time it took the company’s CEO to make that gutsy call? Six days.
On Friday, a unit of Johnson & Johnson expanded a recall of Tylenol products to other over-the-counter medicines, including Benadryl, Motrin, and Rolaids, because of reports of nausea and other symptoms. The time from those initial reports to Friday’s action? Twenty months – and only after the Food and Drug Administration (FDA) had finished an investigation that found multiple problems at the Johnson & Johnson factory.
A trip down memory lane. Listen to the story or read the transcript here.
The business world has been rocked by one scandal after another in the past decade. From Bernie Ebbers to Bernie Madoff, it’s been a confusing and angry time for investors.
In particular, the past 18 months have resembled a horror movie, with flaws exposed at Bear Sterns, Lehman Brothers, Washington Mutual, Fannie Mae, Freddie Mac and AIG. All of that was accompanied by a 777-point one-day plunge in the Dow (plus plenty of dismal trading days that followed) and more than 7 million job losses.
A great article from a very interesting website. Read the article here.
During the past year, the financial sector has done a lot of wrong. First, it nearly self-destructed. Then it engaged with a set of Washington elites to extract trillions of dollars of public funds to ease its pain. Now, it’s posting record bonuses on the back of that assistance, in a disgustingly entitled manner, as if its profits are based on sheer skill, rather than federal aid, accounting tricks, and regulatory indifference. What’s missing from this reckless scenario? Women.
Here we go again… Read the article here.
Enron was the financial scandal that kicked off the decade: a giant energy trading company that appeared to be doing brilliantly—until we finally noticed that it wasn’t. It’s largely been forgotten given the wreckage that followed, and that’s too bad: we may be repeating those mistakes, on a far larger scale.
Specifically, as the largest Wall Street banks return to profitability—in some cases, breaking records—they say everything is rosy. They’re lining up to pay back their TARP money and asking Washington to back off. But why are they doing so well? Remember that Enron got away with their illegalities so long because their financials were so complicated that not even the analysts paid to monitor the Houston-based trading giant could cogently explain how they were making so much money.
After two weeks sifting through over one thousand pages of SEC filings for the largest banks, I have the same concerns. While Washington ponders what to do, or not do, about reforming Wall Street, the nation’s biggest banks, plumped up on government capital and risk-infused trading profits, have been moving stuff around their balance sheets like a multi-billion dollar musical chairs game.
This is progress, but not near enough. Read the article here.
After three days of floor debate, the House voted 223 to 202 to approve the measure. It would create an agency to protect consumers from abusive lending practices, set rules for the trading of some of the sophisticated financial instruments that fueled the crisis, and take steps to reduce the threat that the failure of one or two huge banks or investment firms could topple the entire economy.
The approval of the bill is the most significant step lawmakers have taken to confront the financial crisis since the $700 billion bailout package was rammed through Congress at the peak of the emergency more than a year ago. The bill represents an attempt to address comprehensively what many of its supporters have called the underlying causes of the collapse — reckless risk-taking unrestrained by regulation.
MSNBC.COM (Associated Press)
Read the article here.
Analysis of a dozen published studies testing possible new uses for a Pfizer Inc. epilepsy drug found that reporting of the results was often misleading, indicating the medicine worked better than internal company documents showed.
According to the report, when a company-funded study’s primary finding wasn’t favorable, that result was usually buried and something else positive was highlighted, without disclosing the switch.
New York Times
Read the article here.
Dr. Friedel was the latest victim of a product whose dangers had become known months earlier to the Consumer Product Safety Commission and the companies that made and sold it. Before Dr. Friedel bought Stand ’n Seal, at least 80 people had been sickened using it, two of them fatally.
But even then, with the threat well-documented, the manufacturer, retailer and the commission had failed to remove the hazard from the shelves.
The task of getting dangerous products out of consumers’ reach is perhaps the most pressing challenge the Consumer Product Safety Commission faces in this era of surging recalls, particularly of products from China. It is an essential part of the agency’s mission, because premarket testing is not required for consumer products in the United States.
Court documents show that, as the case unfolded, the product’s maker, BRTT, appeared at times to be more concerned with protecting its bottom line than with taking steps to ensure that the hazard was removed. That meant that hazardous cans of Stand ’n Seal remained on the shelves for more than a year after the 2005 recall.
And the product that BRTT initially rushed to put in its place — and which Dr. Friedel and others bought — contained the same chemical that had apparently caused injuries in the first place, the company and Home Depot now acknowledge.