As published in Bloomberg News, Johnson & Johnson the world’s biggest health-products maker and manufacturer of trans-vaginal mesh and bladder sling devices will provide more corporate oversight of its units’ drug manufacturing and marketing practices to resolve investor lawsuits alleging directors ignored wrongdoing, according to court filings.
J&J officials agreed to create a board-level group to oversee subsidiaries’ compliance with regulatory rules and to adopt updated risk-management policies as part of the settlement of claims filed against directors in federal court in Trenton, New Jersey.
Johnson & Johnson is in talks to resolve investigations of the marketing of its medications, company officials said. The company has agreed to pay as much as $2.2 billion to settle, according to the authors.
Investors sued Johnson & Johnson in 2010 with so-called derivative claims that directors ignored problems with the company’s marketing practices for Risperdal and other drugs and production miscues.
J&J recalled more than 40 types of medicines in 2010, according to the story. “Plaintiffs believed that the Johnson & Johnson board and senior management should be held responsible for not stopping widespread wrongdoing that had seriously harmed Johnson & Johnson’s business.”
The shareholders contend J&J’s decentralized corporate setup allows subsidiaries such freedom to operate independently from corporate headquarters it meant directors were not getting information in a timely fashion, resulting in company missteps.
The “decentralized approach to compliance and quality control resulted in a lack of accountability, a structural excuse for plausible deniability among senior management and Johnson & Johnson’s board, and ultimately, a recipe for disaster,” investors’ lawyers wrote. According to Bloomberg News, the provisions are designed to force directors and executives to “take ownership of regulatory and legal issues before they become major problems,” the lawyers added.
The case is In re Johnson & Johnson Derivative Litigation, 10-cv-2033, U.S. District Court, District of New Jersey (Trenton).
If you or a friend have had health issues related to your trans-vaginal mesh or bladder sling devices, please contact The Law Offices of Michael B. Serling at 1(800)995-6991.