It Had To Happen Sooner Or Later: FDA Slaps J&J With A Consent Decree For Permanent Injunction

The US Food and Drug Administration yesterday announced that a consent decree of permanent injunction has been filed against McNeil-PPC, the consumer products division of Johnson and Johnson, and two of its senior executives, for “failing to comply with current good manufacturing practice requirements as required by federal law. The action prevents McNeil, a subsidiary of Johnson & Johnson, from manufacturing and distributing drugs from its Fort Washington, Pa., facility until the FDA determines that its operations are compliant with the law.”

McNeil Consumer Healthcare Division’s Vice President of Quality Veronica Cruz and the company’s Vice President of Operations for OTC Products Hakan Erdemir were named defendants in the consent decree, filed with the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia on March 10, 2011. The highest ranking company executives in charge of the facilities named in a consent decree are always included (by law) on the civil action.

The decree also requires McNeil to adhere to a strict timetable to bring its facilities in Las Piedras, Puerto Rico, and Lancaster, Pa., into compliance.

Consent decrees are civil actions—not criminal ones— and are meant to be remedial rather than punitive. In other words, there are no fines levied and the agency expects the companies under consent decree to bring their manufacturing facilities back in to compliance with Current Good Manufacturing Practices (CGMP). However, if the company fails or refuses to comply with the FDA, criminal charges can be filed against the companies and the two executives mentioned in the consent decree. The agency had little choice but to seek a consent decree of permanent injunction against McNeil because of manufacturing problems and recalls of several of its signature brands including Tylenol, Motrin, Zyrtec, and Benedryl. Criminal charges may be forthcoming because of possible cover ups of the recall that involved hiring outside contractors to purchase tainted produced in bulk to surreptitiously remove them from store shelves.

FDA had little choice but to seek a consent decree because of the seriousness and continuous nature of the problems at its Fort Washington production facility and the fact that J&J senior executives were either unaware or unconcerned with the problems at its subsidiaries. While working under a consent decree may be embarrassing for J&J, the damage caused by the recalls of some of its most visible consumer and OTC brands may be irreparable.

 Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!

 

Johnson & Johnson Freezes Salaries and Cuts Yearly Bonuses

Times are tough in the financially-struggling pharmaceutical industry and seemingly getting tougher.

First, Bristol-Myer Squibb (BMS) announced last week that it will freeze salaries but not cut yearly performance bonuses for its employees. One week later, Johnson & Johnson (J&J)—a company known not to be upstaged or outdone by a competitor—is planning on cutting the yearly performance-bonuses for 38% of its workforce and will freeze the salaries of certain other employees.

While BMS publicly announced its salary freeze, J&J plans were uncovered in an internal announcement and other company documents obtained by The Wall Street Journal. According to the Journal article, “The health-care giant told employees Jan. 25 that it is making the moves to standardize compensation across its various businesses and regions, thereby making it easier for its workers to move around within the company. In the U.S., the changes will bring bonus targets in line with market levels, one document said.”

Interestingly, J&J hasn't yet reported its CEO, William Weldon’s compensation for last year. In 2009, Mr. Weldon turned down a salary raise. His total compensation in 2008 fell 4.1% from the year before to $29.4 million, according to the most recent regulatory filing.

The salary freeze and bonus cuts help to explain why a good friend and lifelong J&J employee (25 years and counting) wasn’t too keen on the company during a visit earlier this week. During a conversation, in which I unknowingly lauded J&J’s treatment of its employees, my friend quipped “Looks can be deceiving; J&J is like every other big corporation. People really don’t matter—it’s all about P&L”

Until next time...

Good Luck and Good Job Hunting!!!!