Johnson & Johnson Fined $22 Million To End Bad Public Relations
Johnson & Johnson is considered a great stock and a buy for most investors despite the fact that the company cannot seem to shake its problem-plagued public relations. The latest news – the healthcare giant will pay $22.9 million to cover quality control failures.
You’ll recall its McNeil Consumer Healthcare division conducted the largest ever recall of over-the-counter children’s medicines. In April, 2010, McNeil recalled infant and children’s versions of Motrin, Benadryl and Zyrtec, along with children’s Tylenol pain reliever and other mediations, in all about 70% of the children’s over-the-market liquid medications.
Remember the plant closing in Fort Washington Pennsylvania, after contaminated batches of over-the-counter medications were found along with filthy conditions? FDA inspectors were so shocked that the FDA took over the facility and still retains control of the plant and has oversight over three other J&J plants.
A Congressional probe looked into the silent recall, where contractors working for J&J went into retail outlets to buy up the product suspected of being contaminated without declaring an official recall.
A lawsuit filed by consumers and investors claimed the company misled the public and this proposed settlement resolves those claims. Investors in the class bought shares of J&J between October 14, 2008 and July 21, 2010. The settlement awaits a judge’s approval.
As part of the settlement, J&J will admit no wrongdoing and insists that company executives acted in good faith.
The company says its Fort Washington plant is ready to re-open after three years and the company has complied with a consent decree. The company says its Puerto Rico operations are under “tighter scrutiny,” reports Med City News, and 75% of brands are back on store shelves.
Investors seem to be happy. Pharmalot reports shares of J&J have climbed 43 percent over the past year and the company recently increased its investor dividends.