J&J strikes settlement in ‘phantom’ Motrin recall suit

CEO at shareholders meeting
A settlement in a long Motrin case in Oregon will help J&J CEO Alex Gorsky reach his goal of cleaning up the company's consumer health division.

Johnson & Johnson has finally gotten a consumer health care fiasco behind it when it agreed this week to pay Oregon $400,000 to settle a suit stemming from its efforts years ago to retrieve faulty Motrin without the public knowing.

In 2010, Johnson & Johnson’s consumer health unit became a target of public criticism—and of then-FDA Commissioner Margaret Hamburg—after waiting a year to announce it was recalling faulty lots of Motrin. In fact, it later came to light that the company had hired private contractors to walk into convenience stores and buy up the product in 2009. Officials in Oregon were so peeved that the state Attorney General John Kroger sued the company’s McNeil Consumer Healthcare unit in 2011, all the while blasting J&J in the press for doing a “phantom recall.”

Now J&J has agreed to pay the state about $400,000 to settle the case, but did not admit wrongdoing in the settlement. A J&J spokesman told FiercePharma the company is "pleased" to resolve the case. "There was never a health or safety risk associated with the Motrin medicines at issue in the case, and we remain committed to providing consumers with safe and effective over-the-counter medicines," he said.

J&J discovered in 2008 that some lots of Motrin manufactured in Puerto Rico did not dissolve properly.  Rather than announce a broad recall, the company instructed field employees to fan out and buy the product off shelves, acting “like a regular customer,” according to a summary of the settlement obtained by the AP.

It wasn’t until February of 2010 that J&J announced an official Motrin recall. The move came amid broad quality problems in the company’s consumer health division that led to a massive recall of many of its products for kids, including Children’s Tylenol. After the FDA discovered particle contamination and other issues in a Pennsylvania manufacturing plant, J&J was forced to shut the site down. In 2015, the McNeil Consumer Healthcare division pled guilty to a federal misdemeanor charge that it allowed tainted Infants' Tylenol, Children's Tylenol and Children's Motrin onto the market. That case cost the company $25 million in fines.

The Oregon Motrin lawsuit had been dismissed in 2015, when J&J successfully argued that there was no proof faulty Motrin pills were ever sold in that state. But the Oregon State of Appeals later reinstated the case.

While the settlement is not a huge hit to the company by any stretch, it comes at a time when the pharma giant is facing mounting cases alleging its talcum powder may cause ovarian cancer. Last week, a St. Louis jury awarded a $110 million verdict to a woman who alleged her metastatic ovarian cancer was caused by years of using J&J’s talc. The company plans to appeal, but it’s already gearing up for additional trials taking aim at the powder product this year.

If there’s anything J&J CEO Alex Gorsky can appreciate about the Oregon settlement, it's that it helps him chip away at a goal he set when he became CEO in 2012, which was to clean up the company’s troubled consumer division. Toward that end, McNeil implemented improved quality control and oversight standards, and hired Sandra Peterson away from Bayer to deal with the shuttered Pennsylvania plant. The plant reopened in 2015.