Johnson & Johnson to pay $33M to resolve allegations of slipshod manufacturing

Alex Gorsky
J&J CEO Alex Gorsky pledged to fix the company's consumer health manufacturing problems when it became CEO in 2012. The company is settling lingering legal issues tied to that part of its history.

Some years back, Johnson & Johnson resolved the manufacturing problems at a consumer goods plant that had led to the recall of millions of bottles of over-the-counter meds like Children’s Tylenol and Motrin. Now the drugmaker is putting behind it the lingering legal problems that stemmed from that dark period of its history.

The company has agreed to pay $33 million to 42 states and the District of Columbia to resolve allegations that the company’s subsidiary, McNeil-PPC, used “deceptive practices” to market popular over-the-counter products produced at manufacturing plants that weren’t meeting FDA standards, according to a release from the New York Attorney General.

RELATED: J&J’s McNeil shuts down plant in another Tylenol recall

In addition, the company agreed to several conditions on marketing, including that it can’t say on its website that OTC products meet cGMP standards if the company has had a class I or II recall of those products within 12 months.

In an emailed statement today, the company said it was “pleased to finalize a settlement agreement” but the company insisted the product recalls were precautionary “and not undertaken on the basis of any health or safety risks to consumers.”

This settlement comes just two weeks after J&J resolved a related case with the state of Oregon for $400,000. Oregon accused J&J of failing to publicly announce a recall of tainted Motrin in 2009 and instead sending private contractors into stores in the state to retrieve the defective products without the public knowing. It wasn’t until 2010 that it officially recalled the products.

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

That was one of the extensive quality problems J&J had in its consumer health division nearly a decade ago that led it to shut down its key OTC plant in Fort Washington, Pennsylvania, and recall millions of its most popular consumer products, including many for children. The FDA found products out of spec for their API, substandard inactive ingredients and particulate contamination. 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. It paid a $25 million fine.

RELATED: Manufacturing mess at J&J consumer plant results in guilty plea, $20M fine 

J&J CEO Alex Gorsky vowed to fix the issues when he took the top spot in 2012. He had McNeil implement improved quality control and oversight standards, and hired Sandra Peterson away from Bayer to deal with the problems tied to the shuttered Pennsylvania plant. The plant reopened in 2015 after the company invested more than $100 million in upgrades.