Regulatory Focus™ > News Articles > Reports: J&J Reaches Agreement to Settle Lawsuit Over 'Tsunami of Regulatory' Problems

Reports: J&J Reaches Agreement to Settle Lawsuit Over 'Tsunami of Regulatory' Problems

Posted 13 July 2012 | By

Life science manufacturing giant Johnson & Johnson has reportedly reached a tentative settlement agreement with a group of shareholders who had sued the company over allegations of chronically mismanaging its operations, leading to large-scale manufacturing problems and regulatory difficulties.

The Associated Press reports the agreement came after J&J agreed to "big changes, including a new committee of independent board members to get reports about legal and quality problems directly from key executives so they can address them right away."

The regulatory concerns were particularly severe, wrote the Associated Press, as "they've led to dozens of product recalls, keeping some products off the market for a couple years."

A 'Tsunami of Regulatory' Problems

The plaintiffs have called attention to a "tsunami of regulatory and legal difficulties" faced by the company, and as Regulatory Focus reported in April, the company had a particularly rough start to the year. 

In the first quarter of 2012, J&J suffered from several massive fines for improper marketing, high-level product safety concerns, additional allegations of improper marketing, bad publicity over its CEO retiring to a $143 million deferred compensation package, continued problems at its Ben Venue manufacturing site in Ohio and several high-profile recalls of its consumer products.

The restructured oversight mechanism will be aimed at alleviating or eliminating some of these problems-and prevent them from happening again in the future-by making executives "take responsibility for identifying and addressing problems," the plaintiffs said in court filings. The previous structures, allege the plaintiffs, allowed key executives to maintain "plausible deniability" thanks to a highly decentralized organizational structure.

The tentative agreement is still subject to court approval, reports Bloomberg.

Read more:

AP - J&J, shareholders reach tentative deal in lawsuit

Bloomberg - J&J To Improve Drug Marketing Reviews In Lawsuit Accords

Plarmalot - J&J Agrees to beef up Internal Oversight

Fierce Pharma - J&J to tighten up on oversight in wake of recalls, lawsuits

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