J&J Will Take $600 Million Charge to Pay for Lawsuits
Johnson & Johnson (JNJ) will set aside $600 million in the second quarter to increase its reserves for potential settlements of civil lawsuits alleging it illegally marketed drugs including the anti-psychotic Risperdal.
J&J established a $1.7 billion fund in 2011 for litigation settlements, the New Brunswick, New Jersey-based company said in its January earnings report. An Arkansas state judge in April ordered J&J to pay more than $1.1 billion for illegally marketing and misleading doctors and patients about the risks of Risperdal starting in 2002. J&J, the world’s top seller of health-care products, said it will appeal.
The $600 million will be used if settlements are reached in previously disclosed civil cases regarding Risperdal, the anti- psychotic Invega and Omnicare Inc. (OCR), which distributes pharmaceuticals to nursing homes and assisted living facilities, J&J said yesterday in a statement. The money will also be used for cases involving the heart failure drug Natrecor. J&J pleaded guilty to misbranding the drug in September and agreed to pay an $85 million fine.
Bill Price, a J&J spokesman, said the company wouldn’t comment beyond the statement.
J&J gained less than 1 percent to $62.98 yesterday at the close in New York. The shares have declined 4.8 percent in the past 12 months.
The U.S. Justice Department demanded in March that J&J pay about $1.8 billion to resolve the civil claims by the U.S. and some states, an increase from a $1 billion settlement that had been negotiated by the U.S. Attorney’s Office in Philadelphia in late December.
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