healthy4u: Netherlands

Legal and regulatory actions unfavorable for giant pharmaceutical, biotechnology and device company Johnson and Johnson just keep coming.  We last discussed such a story only two weeks ago <a href="http://hcrenewal.blogspot.com/2013/12/how-many-straws-johnson-and-johnson.html">here</a>. <br /><br /><b>The Latest Case </b><br /><br />This latest story got only desultory US coverage from the wire services.  The most complete version is in the European Commission <a href="http://europa.eu/rapid/press-release_IP-13-1233_en.htm">press release</a>.  <br /><br />The basics were:<br /><br /><blockquote class="tr_bq"><i>The European Commission has imposed fines of € 10 798 000 on the US  pharmaceutical company Johnson & Johnson (J&J) and € 5 493 000  on Novartis of Switzerland. In July 2005, their respective Dutch  subsidiaries concluded an anticompetitive agreement to delay the market  entry of a cheaper generic version of the pain-killer fentanyl in the  Netherlands, in breach of EU antitrust rules.</i></blockquote><br />In more detail,<br /><br /><br /><blockquote class="tr_bq"><div class="A_Standard__35__20_Normal">J&J initially developed  Fentanyl and has commercialised it in different formats since the 1960s.  In 2005, J&J's protection on the fentanyl depot patch had expired  in the Netherlands and <i>Novartis' Dutch subsidiary, Sandoz, was on the  verge of launching its generic fentanyl depot patch</i>. It had already  produced the necessary packaging material. </div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">However, in July 2005, instead of  actually starting to sell the generic version, <i>Sandoz concluded a  so-called 'co-promotion agreement' with Janssen-Cilag, J&J's Dutch  subsidiary.</i> <i>The<span class="A__T3"> agreement </span>provided strong  incentives for Sandoz not to enter the market</i>. Indeed, the agreed  monthly payments exceeded the profits that Sandoz expected to obtain  from selling its generic product, for as long as there was no generic  entry. <span class="A__T3">Consequently, <i>Sandoz did not offer its  product on the market. The agreement was stopped in December 2006 when a  third party was about to launch a generic fentanyl patch.</i></span> </div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal"><i>The agreement therefore delayed  the entry of a cheaper generic medicine for seventeen months and kept  prices for fentanyl in the Netherlands artificially high</i> - to the  detriment of patients and taxpayers who finance the Dutch health system.</div></blockquote><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">The obligatory colorful bits,</div><div class="A_Standard__35__20_Normal"><br /></div><blockquote class="tr_bq"><div class="A_Standard__35__20_Normal"> Why did J&J and Novartis conclude that agreement? According to  internal documents Sandoz would abstain from entering the Dutch market  in exchange for '<span class="A__T2"><i>a part of [the] cake</i>'</span>. Instead of competing, Janssen-Cilag and Sandoz agreed on cooperation so as '<i><span class="A__T1">not to have a depot generic on the market and in that way to keep the high current price</span></i>'.  Janssen-Cilag did not consider any other existing potential partners  for the so-called 'co-promotion agreement' but just focused on its close  competitor Sandoz. Sandoz engaged in very limited or no actual  co-promotion activities.</div></blockquote><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">So, </div><div class="A_Standard__35__20_Normal"><br /></div><blockquote class="tr_bq"><div class="A_Standard__35__20_Normal"><i> The Commission therefore concluded that the object of this agreement was  anticompetitive and infringed Article 101 of the Treaty on the  functioning of the European Union (TFEU). </i></div></blockquote><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal"><b>Johnson and Johnson's Ever Lengthening Unhappy Legal History </b><br /><br />There have been so many settlements made by, fines assessed against, and other adverse legal actions affecting Johnson and Johnson in the recent past that we must make a major revision of our summary of such cases (see same appended at the end of this post.)</div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">Yet despite all these actions, there is no hint that anything will change at the company.  After all, it is extremely profitable, and all the fines, while they individually appear large, are not a big fraction of the money it brings in.  And, as we have noted far too often, not one of these actions actually provides any negative consequences, much less severely punishes anyone at the company who authorized, directed, or implemented the bad behavior.  </div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">Instead, the leadership of the company continues to make itself very rich. As we wrote <a href="http://hcrenewal.blogspot.com/2013/07/johnson-and-johnson-settles-suit.html">here</a>,  Mr William Weldon, the outgoing CEO on whose watch most of the  misbehavior resulting in the legal actions listed in the appendix below occurred, retired with a  huge retirement package, after receiving extremely generous  compensation prior to that.  The new CEO as of April, 2012,  Mr  Alex  Gorsky, per<a href="http://www.investor.jnj.com/common/download/download.cfm?companyid=JNJ&fileid=644762&filekey=44D6D309-4972-4DAE-97C5-60157E6C6CD1&filename=JNJ_2013_Proxy_Statement.PDF"> the company's 2013 proxy statement</a>,  already owns more than 190,000 Johnson and Johnson shares,  and  received $10,977,109  total compensation in 2012.  Mr Weldon received  over $29 million in total compensation just for 2012, the year in which  he retired.  Other top executives received from over $3.5 million to  over $8 million. One can only imagine how much top executives are making this year.</div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">So Johnson and Johnson, once admired for proclaiming in its famous <a href="http://www.jnj.com/about-jnj/jnj-credo">credo</a> to "put the needs and well-being of the people we serve <i>first</i>," now seems to put its own hired managers first.  It boggles the mind that despite this amazing record of bad behavior, the executives who presided over it still have jobs, have made no obvious changes in how they manage the company, and in fact continue to get ridiculously rich.  The <a href="http://www.investor.jnj.com/governance/board.cfm">board of directors</a>, which includes the <a href="http://www.investor.jnj.com/governance/biodetail.cfm?bioid=4341">President of the University of Michigan</a>, a <a href="http://www.investor.jnj.com/governance/biodetail.cfm?bioid=4341">Professor and Emeritus Chancellor and Vice President of Health Affairs at Emory</a>, a <a href="http://www.investor.jnj.com/governance/biodetail.cfm?bioid=5191">Professor at MIT</a>, a <a href="http://www.investor.jnj.com/governance/biodetail.cfm?bioid=44646">former FDA Commissioner, and Senior Fellow at the Brookings Institute</a>, and the <a href="http://www.investor.jnj.com/governance/biodetail.cfm?bioid=40456">Vice Chancellor of Health Sciences, Dean of the David Geffen School of Medicine at the University of California, Los Angeles (UCLA); Chief Executive Officer of the UCLA Health System</a>, who seemingly ought to care about the integrity of evidence, protecting patients from harm, and the need for simple honesty, have not obviously done anything about the apparent massive violation of the company credo that has made its managers wealth.   Other than the stockholder lawsuit discussed below, the supposed owners of the company seem to be mute.</div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">When will the straws break the camel's back?  In the absence of such a fracture, I repeat like an old, broken record... </div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal">Many of largest and once proud health care organizations now have recent  records of repeated, egregious ethical lapses. Not only have their  leaders have nearly all avoided penalties, but they have become  extremely rich while their companies have so misbehaved. <br /><br />These leaders seem to have become like nobility, able to extract money  from lesser folk, while remaining entirely unaccountable for bad results  of their reigns. We can see from this case that health care  organizations' leadership's nobility overlaps with the supposed  "royalty" of the leaders of big financial firms, none of whom have gone  to jail after the global financial collapse, great recession, and  ongoing international financial disaster (look <a href="http://hcrenewal.blogspot.com/2012/08/duchess-of-wellpoint-abdicates-likely.html">here</a>).  The current fashion of punishing behavior within health care  organization with fines and agreements to behave better in the future  appears to be more law enforcement theatre than serious deterrent.  As  Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I  exhort state, federal (and international, for that  matter) law  enforcement to "<a href="http://www.washingtonpost.com/blogs/election-2012/wp/2012/09/04/patrick-it-is-time-for-democrats-to-grow-a-backbone/">grow a backbone</a>" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.<br /><br />Again, true health care reform would make leaders of  health care organization accountable for their organizations' bad  behavior.</div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal"><b>Appendix - Johnson and Johnson Recent Legal Record</b></div><div class="A_Standard__35__20_Normal"><br /></div><div class="A_Standard__35__20_Normal"></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;"><u>2010 </u></span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- Convictions in two different states in 2010 for misleading marketing of Risperdal</span><br /><span style="background-color: #eeeeee;">- A guilty plea for misbranding Topamax in 2010</span><br /><span style="background-color: #eeeeee;"><u>2011</u></span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- Guilty pleas to bribery in Europe in 2011 by Johnson and Johnson's DePuy subsidiary</span><br /><span style="background-color: #eeeeee;">- A guilty plea for marketing Risperdal for unapproved uses in 2011 (see <a href="http://hcrenewal.blogspot.com/2011/08/why-cultivate-weldons-confidence-ceo.html">this link</a> for all of the above)</span><br /><span style="background-color: #eeeeee;">- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post <a href="http://hcrenewal.blogspot.com/2011/09/johnson-and-johnson-pleads-guilty.html">here</a>)</span><br /><span style="background-color: #eeeeee;"><u>2012 </u></span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- In 2012, testimony in a trial of allegations of  unethical marketing of the drug Risperdal (risperidone) by the Janssen  subsidiary revealed a systemic, deceptive stealth marketing campaign  that fostered suppression of research whose results were unfavorable to  the company, ghostwriting, the use of key opinion leaders as marketers  in the guise of academics and professionals, and intimidation of  whistleblowers. After these revelations, the company abruptly settled  the case (see post <a href="http://hcrenewal.blogspot.com/2012/02/texas-tmap-trials-as-illustration-of.html">here</a>).</span><br /><span style="background-color: #eeeeee;">-  Also in 2012,  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for  deceiving patients and physicians again about Risperdal (look <a href="http://hcrenewal.blogspot.com/2012/04/once-more-with-feeling-johnson-and.html">here</a>).</span><br /><span style="background-color: #eeeeee;">-  Also in 2012, Johnson & Johnson announced it would pay $181  million to resolve claims of deceptive advertising again about Risperdal  (see this <a href="http://hcrenewal.blogspot.com/2012/09/how-many-legal-settlements-does-it-take.html">post</a>). </span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;"><u>2013</u></span> </div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">-  In 2013, Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this <a href="http://hcrenewal.blogspot.com/2013/07/johnson-and-johnson-settles-suit.html">post</a>)</span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">-  In 2013, Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this <a href="http://hcrenewal.blogspot.com/2013/11/another-and-huge-22-billion-settlement.html">post</a>).  </span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">-  In 2013, Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .</span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- In 2013, Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this <a href="http://hcrenewal.blogspot.com/2013/11/there-they-go-again-again-johnson-and.html">post</a> for this and above case).</span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- In 2013, Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this <a href="http://hcrenewal.blogspot.com/2013/12/how-many-straws-johnson-and-johnson.html">post</a>). </span></div><div class="A_Standard__35__20_Normal"><span style="background-color: #eeeeee;">- In 2013, Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (in the current post above).  </span></div>

The Camel's Aching Back - Johnson and Johnson and Novartis Fined 16 Million Euro for "Anticompetitive" Scheme to Delay Generic Fentanyl

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