McNeil 2010 Recall News

Recall News

1. Future still hazy for Johnson & Johnson's Ft. Washington factory

   Jan 21, 2015 | Philadelphia Inquirer

   By David Sell
   
   
   Office work never ceased, but the factory that pumped out Tylenol and other iconic over-the-counter brands has been idle since 2010 because of production problems that led to dozens of recalls. J&J said it has spent $100 million to fix the problems and rebuild for future use. McNeil will need the approval of the FDA and a federal judge to resume making medicine there. McNeil plants in Lancaster and Puerto Rico had been allowed to operate with restrictions.
2. New Recalls by Johnson & Johnson Raise Concern About Quality Control Improvements

   Sep 13, 2013 | The New York Times

   By Katie Thomas
   
   
   Still, some experts said the two recalls, announced over such a short span, raised questions about how well the company has improved its oversight after a string of manufacturing problems threatened its image as one of the world’s most trusted brands. The company has recalled everything from Tylenol to contact lenses and artificial hips in recent years, and is operating under a consent decree with the Food and Drug Administration in which it has promised to overhaul production at three manufacturing plants. One plant, in Fort Washington, Pa., has been closed since 2010.
3. Tylenol Can Kill You

   Sep 21, 2013 | Business Insider

   By Jeff Gerth
   
   
   By the end of 2010, the recalls had cost McNeil approximately $900 million in sales, it reported. Many Tylenol products vanished from the shelves for months. The company recently acknowledged that it faces federal investigations related to the recalls; it said it is cooperating with the probes. The company’s Fort Washington plant remains closed.
4. J&J Agrees to Pay $22.9 Million to Settle on Drug Recalls

   Jul 17, 2013 | Bloomberg

   By David Voreacos and Jef Feeley
   
   
   The proposed settlement, filed July 15 in federal court in Trenton, New Jersey, would resolve claims that the failures led to the largest recall of over-the-counter children’s medicine in U.S. history, a plant closing and a congressional probe. The group, or class-action, accord still needs a judge’s approval.
5. CVS stops putting Tylenol in some stores to end supply holes

   Jan 14, 2013 | Reuters

   By Brad Dorfman
   
   
   Since 2009, faulty manufacturing has prompted J&J's McNeil unit to recall millions of bottles and packages of Tylenol, Benadryl, Motrin and other over-the-counter medicines. At the same time, CVS and other retailers have been putting more emphasis on their private-label products, which cost less than brand-name products but can be more profitable for retailers.
6. Why J&J Is Behind Schedule Reviving Its Consumer Business

   Apr 18, 2012 | Forbes

   By Ed Silverman
   
   
   If you were wondering why the befuddled Johnson & Johnsonexecutive team had to postpone the rebirth of its troubled FortWashington, Pennsylvania, facility, consider this simple analogy. Imagine an old kitchen that was used to make great food, but once-exquisite meals gradually became horrible – tasty dishes began smelling funny and looking bad on the plate. You sometimes got the runs or, still worse, food poisoning.
7. J&J quarterly profit beats forecast, but sales lag

   Apr 7, 2012 | Reuters

   By Ransdell Pierson and Lewis Krauskopf
   
   
   Conover said the McNeil consumer healthcare unit that makes the OTC brands had peak sales of $5.9 billion in 2008, representing more than 9 percent of total company revenue. The unit's sales last year dropped to $4.4 billion, or only 6 percent to 7 percent of company revenue, as a giant plant in Fort Washington, Pennsylvania remained down for repairs
8. Johnson & Johnson CEO resigns after series of missteps

   Feb 21, 2012 | CNN Money

   By David Goldman
   
   
   Recall after recall hit J&J (JNJ, Fortune 500) division McNeil Consumer Healthcare, culminating in the Food and Drug Administration's takeover of three of the company's factories that manufactured Tylenol last March.
9. Infant Tylenol Recall: Johnson & Johnson Recalls Medicine Over Bottle Design Problems

   Feb 17, 2012 | AP/Huffington Post

   By Linda Johnson
   
   
   Infants' Tylenol is one of the first nonprescription medicines reintroduced after all the recalls and an ongoing factory shutdown have kept most McNeil medicines off the market, some for nearly 2 years. That's cost the company well over $1 billion in lost revenue, plus many millions to rebuild one factory and upgrade others.
10. J&J Still Sees Impact of McNeil Recalls, But Brands Are Coming Back

    Jan 24, 2012 | Wall Street Journal

    By Katherine Hobson and Peter Loftus
    
    
    J&J also said it was making progress addressing the requirements of an FDA consent decree it signed last March covering a now-closed plant in Fort Washington, Penn. as well as two other plants that are still open. The Fort Washington plant is expected to reopen next year.
11. U.S. takes over three Tylenol plants

    Mar 10, 2011 | CNN Money

    By Parija Kavilanz
    
    
    McNeil, a division of Johnson & Johnson (JNJ, Fortune 500), said it had agreed to put its plants -- one in Las Piedras, Puerto Rico, one in Fort Washington, Pa. and one in Lancaster, Pa., under FDA supervision.
12. Maker of children's drugs accused of hiding Motrin recall from public

    May 28, 2010 | The Washington Post

    By Lyndsey Layton
    
    
    The FDA, which is investigating McNeil's three production facilities in the United States and is considering criminal prosecutions, found multiple violations of good manufacturing practices at McNeil's largest facility in Fort Washington, Pa., according to FDA officials. The company stopped production at that facility in April just days before FDA officials conducted a two-week inspection that resulted in the recall of more than 40 varieties of the medicines for infants and children. It remains closed.

Recall News

1. Future still hazy for Johnson & Johnson's Ft. Washington factory

   Jan 21, 2015 | Philadelphia Inquirer

   By David Sell

   Johnson & Johnson has been a long-term moneymaker, and it said Tuesday that its full-year profit for 2014 rose 18 percent, but the last few months were less profitable for the health-care giant. And it forecast declining profits in the near term because of price pressure on big-ticket drugs, stretched consumers, and tumult in world currency markets.

   Though consumer products are the smallest of its three divisions, the tumult in Fort Washington, site of the headquarters of J&J's McNeil Consumer Healthcare unit, might finally be nearing a regulatory end. But then, previous target dates have come and gone.

   Office work never ceased, but the factory that pumped out Tylenol and other iconic over-the-counter brands has been idle since 2010 because of production problems that led to dozens of recalls. J&J said it has spent $100 million to fix the problems and rebuild for future use. McNeil will need the approval of the FDA and a federal judge to resume making medicine there. McNeil plants in Lancaster and Puerto Rico had been allowed to operate with restrictions.

   "While the McNeil OTC [over-the-counter] brand continues to operate under a consent decree, they are on track with all of their commitments, and a consistent supply of these products is returning to the market," chief executive officer Alex Gorsky told financial analysts in a conference call Tuesday.

   A third-party is often engaged to help the FDA decide whether to recommend that production be allowed to resume. That third party in the McNeil case is the Quantic Group of Livingston, N.J.

   A McNeil spokeswoman said Tuesday that McNeil had "completed the steps required for third-party certification for our Fort Washington plant," and Quantic is "working on the certification letter to the FDA."

   Spokesmen for Quantic did not return e-mails seeking comment. A call to the office was transferred to a man named Tim, who declined to give his last name or comment. The FDA declined comment.

   J&J's yearly revenue rose 4.2 percent to $74.3 billion for 2014. Fourth-quarter sales declined 0.6 percent and profit fell 28 percent from the same period in 2013. J&J said the difference was partly from loss of revenue from the Ortho-Clinical Diagnostics business, which had $1.9 billion in sales in 2013 and was sold to the Carlyle Group for about $4 billion in June. J&J said it also set aside $1.1 billion to cover one-time expenses, including legal bills. The company faces many lawsuits, including one on the antipsychotic drug Risperdal that went to trial Tuesday in Philadelphia Common Pleas Court.

   J&J took pains to separate its hepatitis C drug Olysio from reports and projections for 2015 because payers worldwide are pushing back on the high price for all new drugs in that category.

   J&J's other Philadelphia regional units include the Animas and DePuy Synthes medical device operations in Chester County. Gorsky engineered the $19.7 billion purchase of Synthes in 2011 and it helped launch him into the CEO job, which has proven quite lucrative. Though J&J's stock price fell to $101.29 Tuesday, it is closer to the top than bottom of its 52-week range ($86.09 to $109.49).

   According to a Securities and Exchange Commission filing, Gorsky made $16.9 million in total compensation for the 2013 fiscal year. While many Americans have suffered from stagnant wages, Gorsky is not among them. He made $10.98 million in 2012 and $6.8 million in 2011.

   
   Read more at http://www.philly.com/philly/business/20150121_Future_still_hazy_for_Johnson___Johnson_s_Ft__Washington_factory.html#ZR6LHIseCxawCJD8.99
   

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2. New Recalls by Johnson & Johnson Raise Concern About Quality Control Improvements

   Sep 13, 2013 | The New York Times

   By Katie Thomas

   After years of struggling to improve its image after major quality lapses, the consumer giant Johnson & Johnson announced two recalls of well-known products in the space of a week, raising questions about the extent to which it has moved on from its past problems.Add to 

   The company’s pharmaceutical unit, Janssen, informed doctors and patients on Wednesday that it was recalling one lot of Risperdal Consta, an injectable antipsychotic treatment, after routine testing turned up evidence of mold.
   

   And last week, Johnson & Johnson recalled 200,000 bottles of liquid Motrin for infants because they may contain tiny particles of plastic.

   In both cases, the recalls involved products or ingredients that were made by outside companies.

   Risperdal Consta, a long-acting version of the pill form of Risperdal that is typically administered in a doctor’s office or clinic, is made by the company Alkermes, based in Ireland. It referred all questions to Johnson & Johnson.

   McNeil Consumer Healthcare, the over-the-counter division at Johnson & Johnson, said the plastic particles in Motrin — which were about the size of a poppy seed — originated at a third-party manufacturer of Motrin’s active ingredient, ibuprofen. The company did not name the manufacturer.

   The company said in both cases that the risk to patients was low and it had received no reports of serious harm.

   Still, some experts said the two recalls, announced over such a short span, raised questions about how well the company has improved its oversight after a string of manufacturing problems threatened its image as one of the world’s most trusted brands. The company has recalled everything from Tylenol to contact lenses and artificial hips in recent years, and is operating under a consent decree with the Food and Drug Administration in which it has promised to overhaul production at three manufacturing plants. One plant, in Fort Washington, Pa., has been closed since 2010.

   “Even the most careful company is occasionally going to have a recall,” said Erik Gordon, who teaches business at the University of Michigan and follows the pharmaceutical industry. But given Johnson & Johnson’s history, he said, the recalls indicate “they’re not there yet. They have not repaired the damage that was done to Johnson and Johnson’s quality control infrastructure.”

   Ernie Knewitz, a spokesman for Johnson & Johnson, said the company had been working to improve quality by creating a single, streamlined supply chain and shifting focus to the early detection of potential problems. This heightened attention, he said, has led to several product recalls. He added, “Our goal is to minimize recalls, and yet when we recall a product, we are acting in the best interest of the consumers of our products.”

   Johnson & Johnson has worked hard to repair its image and returned some of its best-known over-the-counter brands to the market. It named a new chief executive, Alex Gorsky, to replace William C. Weldon, who had been criticized for focusing too much attention on cost-cutting and too little on quality. Mr. Gorsky, a longtime company executive, has said he would place fixing the quality problems among his highest priorities.

   Johnson & Johnson officials said over the summer that they plan to return three-quarters of the company’s over-the-counter brands to pharmacy shelves by the end of the year, and that they are meeting the F.D.A.’s requirements under the consent decree.

   But even as it has sought to move past its difficulties, the company has continued to encounter problems. In May, the company recalled Children’s Tylenol in South Korea after discovering that levels of the pain reliever’s active ingredient, acetaminophen, were too high. Then, a month later, it recalled millions of packs of birth-control pills in Latin America, Europe and Asia after finding that one of the hormones in the pills was not releasing properly into the body. Other company recalls this year include blood glucose meters and some versions of the personal lubricant K-Y Jelly.

   Some manufacturing experts said that the recent recalls may indicate that Johnson & Johnson is being extra cautious. The company estimates that only about 5,000 units of Risperdal Consta out of the original 70,000 in the lot remain unused, and said the risk to patients from the mold, which is commonly found in the environment, was low. In the case of Motrin for infants, the plastic particles were detected in another lot of the same product — one-half fluid ounce bottles of Concentrated Motrin Infant Drops, in “Original Berry Flavor” — which was not distributed. The company said it was recalling the three lots that were distributed out of “an abundance of caution.”

   “Maybe a company under less scrutiny would choose to wait these out as opposed to issuing a voluntary recall,” said John Gray, an associate professor at the Fisher College of Business at Ohio State University. Mr. Gray formerly worked in operations management at the consumer-products company Procter & Gamble, and focuses his research on pharmaceutical manufacturing quality. “Given everything that’s happened, I would expect that Johnson & Johnson has a pretty heavy focus on quality right now.”

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3. Tylenol Can Kill You

   Sep 21, 2013 | Business Insider

   By Jeff Gerth

   During the last decade, more than 1,500 Americans died after accidentally taking too much of a drug renowned for its safety: acetaminophen, one of the nation’s most popular pain relievers.

   Acetaminophen – the active ingredient in Tylenol – is considered safe when taken at recommended doses. Tens of millions of people use it weekly with no ill effect. But in larger amounts, especially in combination with alcohol, the drug can damage or even destroy the liver.

   Davy Baumle, a slender 12-year-old who loved to ride his dirt bike through the woods of southern Illinois, died from acetaminophen poisoning. So did tiny five-month-old Brianna Hutto. So did Marcus Trunk, a strapping 23-year-old construction worker from Philadelphia.

   The toll does not have to be so high.

   The U.S. Food and Drug Administration has long been aware of studies showing the risks of acetaminophen – in particular, that the margin between the amount that helps and the amount that can cause serious harm is smaller than for other pain relievers. So, too, has McNeil Consumer Healthcare, the unit of Johnson & Johnson that has built Tylenol into a billion-dollar brand and the leader in acetaminophen sales.

   Yet federal regulators have delayed or failed to adopt measures designed to reduce deaths and injuries from acetaminophen overdose, which the agency calls a “persistent, important public health problem.”

   The FDA has repeatedly deferred decisions on consumer protections even when they were endorsed by the agency’s own advisory committees, records show.

   In 1977, an expert panel convened by the FDA issued urgently worded advice, saying it was “obligatory” to put a warning on the drug’s label that it could cause “severe liver damage.” After much debate, the FDA added the warning 32 years later. The panel’s recommendation was part of a broader review to set safety rules for acetaminophen, which is still not finished.

   Four years ago, another FDA panel backed a sweeping new set of proposals to bolster the safety of over-the-counter acetaminophen. The agency hasn’t implemented them. Just last month, the FDA blew through another deadline.

   Regulators in other developed countries, from Great Britain to Switzerland to New Zealand, have limited how much acetaminophen consumers can buy at one time or required it to be sold only by pharmacies. The FDA has placed no such limits on the drug in the U.S. Instead, it has continued to debate basic safety questions, such as what the maximum recommended daily dose should be.

   For its part, McNeil has taken steps to protect consumers, most notably by helping to fund the development of an antidote to acetaminophen poisoning that has saved many lives.

   But over more than three decades, the company repeatedly fought against safety warnings, dosage restrictions and other measures meant to safeguard users of the drug, according to company memos, court records, documents obtained under the Freedom of Information Act, and interviews with hundreds of regulatory, corporate and medical officials.

   In the 1990s, McNeil tried to create a safer version of acetaminophen, an effort dubbed Project Protect. But after the initiative failed, the company kept its experiments confidential, even when the FDA inquired about the feasibility of developing such a drug.

   Later, McNeil opposed even a modest government campaign to educate the public about acetaminophen’s risks, in part because it would harm Tylenol sales.

   All the while, it has marketed Tylenol’s safety. Tylenol was the pain reliever “hospitals use most,” one iconic ad said. The one “recommended by pediatricians,” said another. “Safe, fast pain relief,” its packages promised.

   YouTube/ProPublica

   In written responses to questions for this story, as well as a pre-recorded statement  by its vice president for medical affairs, McNeil said it has always acted to ensure its products were used safely.

   “McNeil takes acetaminophen overdose very seriously, which is why we have taken significant steps over the years to mitigate the risk,” the company wrote. McNeil has engineered safety packaging and spent millions on research, education and poison control centers that advise people who have overdosed.

   The company said that science on acetaminophen had evolved over time and that it had implemented safety measures accordingly. Most recently, it announced it will soon add red lettering to the caps of medicine bottles saying they contain acetaminophen and that users should read the label.

   In several cases, after FDA advisors recommended the agency enact safety measures over McNeil’s objections, the company adopted them before the agency forced it to do so. The company then said it was taking such steps voluntarily. McNeil also stressed that it has always followed FDA regulations.

   McNeil objected to the thrust of questions from ProPublica and This American Life, saying they indicated “a clear bias” in favor of plaintiff’s lawyers who are suing the company.

   The company declined to answer questions about individual cases of death or injury. “Our hearts go out to those who have suffered harm from acetaminophen overdose, and to the families of those who lost their lives as a result,” McNeil wrote in its statement.

   FDA officials said the agency saw the benefits of keeping acetaminophen widely available as outweighing the “relatively rare” risk of liver damage or death. Some patients cannot tolerate drugs such as ibuprofen, and for them acetaminophen may be the best option, said one agency official.

   The FDA has bolstered acetaminophen warnings as new science about the drug emerged, the agency said in a statement.

   But FDA officials acknowledged the agency had moved sluggishly to address the mounting toll of liver damage caused by acetaminophen. They blamed changing research, small budgets, an overworked staff and a cumbersome process for changing rules for older drugs such as Tylenol slowing them down.

   The agency has greater authority over prescription drugs, and it has already slapped medications containing acetaminophen with a “black box warning” that says overdosing can lead to “liver transplant and death.” Paradoxically, the same medicine sold over the counter does not tell patients that death is a possible side effect.

   “Among over-the-counter medicines, it’s among our top priorities,” said Dr. Sandy Kweder, one of the FDA’s top experts on acetaminophen. “It just takes time.”

   Many doctors believe in acetaminophen and some medical associations advise patients to take it for mild to moderate pain or reducing fever. “Given the number of doses given annually, the track record is incredibly safe,” said Dr. Bill Banner, a pediatrician and the medical director of the Oklahoma Poison Control Center.

   Every over-the-counter pain reliever can cause harm. Even without overdosing, aspirin and ibuprofen can lead to stomach bleeding. In extremely rare cases, according to the FDA, recommended doses of ibuprofen and acetaminophen can provoke a skin reaction that can kill.

   But the FDA says acetaminophen carries a special risk. About a quarter of Americans routinely take more over-the-counter pain relief pills of all kinds than they are supposed to, surveys show. That behavior is "particularly troublesome" for acetaminophen, an FDA report said, because the drug's narrow safety margin places "a large fraction of users close to a toxic dose in the ordinary course of use.”

   The FDA sets the maximum recommended daily dose of acetaminophen at 4 grams, or eight extra strength acetaminophen tablets. That maximum applies to both over-the-counter and prescription drugs with acetaminophen.

   Taken over several days, as little as 25 percent above the maximum daily dose – or just two additional extra strength pills a day – has been reported to cause liver damage, according to the agency. Taken all at once, a little less than four times the maximum daily dose can cause death. A comparable figure doesn't exist for ibuprofen, because so few people have died from overdosing on that drug.

   About as many Americans take ibuprofen as take acetaminophen, according to consumer surveys from the mid-2000s.

   The U.S. Centers for Disease Control and Prevention and the American Association of Poison Control Centers collect data on the number of deaths associated with each drug, but the figures are incomplete, making comparisons subject to question. McNeil contends the databases do not contain the information needed to draw conclusions about the relative risks of different medicines. The company and some epidemiologists maintain that these data sets undercount deaths resulting from chronic use of naproxen, ibuprofen and similar pain relievers. (More on the numbers can be found here.)

   Still, the data show that acetaminophen is linked to more deaths than any other over-the-counter pain reliever.

   From 2001 to 2010, annual acetaminophen-related deaths amounted to about twice the number attributed to all other over-the-counter pain relievers combined, according to the poison control data.

   In 2010, only 15 deaths were reported for the entire class of pain relievers, both prescription and over-the-counter, that includes ibuprofen, data from the CDC shows.

   That same year, 321 people died from acetaminophen toxicity, according to CDC data. More than half – 166 – died from accidental overdoses. The rest overdosed deliberately or their intent was unclear. For the decade 2001 through 2010, the data shows, 1,567 people died from inadvertently taking too much of the drug.

   Acetaminophen overdose sends as many as 78,000 Americans to the emergency room annually and results in 33,000 hospitalizations a year, federal data shows. Acetaminophen is also the nation’s leading cause of acute liver failure, according to data from an ongoing study funded by the National Institutes for Health.

   Behind these statistics are families upended and traumatized and, in the worst cases, shattered by loss.

   Just before Christmas 1999, 12-year-old Davy Baumle came down with a sore throat. For a week, his parents, David and Udosha Baumle, gave him Maximum Strength Tylenol Sore Throat, measuring out doses of the thick syrup.

   But instead of getting better, Davy became listless. On Christmas Day, he threw up blood. His father took him to a local emergency room wrapped in a fuzzy brown blanket. A few days later, the boy was declared brain dead.

   The Baumles later sued McNeil, claiming the company had failed to warn consumers of its product’s lethal danger. At trial, they testified they never gave Davy more than the recommended dose, 4 grams per day, or eight tablespoons. An expert for the company testified that lab work suggested the boy had ingested more, 6 to 10 grams, over several days.

   The difference amounted to as little as 4 tablespoons a day, but the company prevailed, persuading the jury that the Baumles had not used Tylenol precisely as specified.

   David Baumle said he would never have given his son the drug if he knew it was potentially lethal. At the time, the label simply warned of “serious health consequences” in case of overdose.

   “They tell you it’s medicine,” he said. “They don’t tell you it can kill you.”

   Tylenol was born in 1955, when the family-owned McNeil Laboratories introduced a liquid for children called Tylenol Elixir.

   The drug’s key ingredient, acetaminophen, was developed in the late 1800s in Germany’s coal tar industry. McNeil seized on the drug’s potential after American research suggested that the medication does not cause stomach bleeding, as aspirin can. McNeil named the product based on letters in the chemical term for acetaminophen, N-acetyl-p-aminophenol.

   Johnson & Johnson acquired McNeil in 1959, the same year that Tylenol was approved for over-the-counter sales. Soon thereafter, the first adult version of Tylenol rolled off the company’s production line in Fort Washington, Pa., the site of McNeil’s current headquarters.

   Unlike companies that develop prescription drugs, McNeil has no patent on acetaminophen, and so no right to sell it exclusively. Virtually every drug store stocks generic acetaminophen, usually on the same shelf as Tylenol. To sell Tylenol at a premium, the company had to persuade customers they were getting extra value.

   Tylenol has had “generic competition for 40 years,” said Ashley McEvoy, then the president of McNeil, in a webcast interview posted in 2008. “If I look back at what’s garnered success for McNeil, it’s the enduring value of brands.”

   The company aimed its early sales pitches at doctors, according to a company history, working to persuade them to recommend Tylenol as a safer alternative to aspirin. To this day, the company’s formula for success hinges on positioning Tylenol as safer than other painkillers and more trustworthy than generics.

   Perhaps the most famous chapter in McNeil’s corporate history is its response when several people in the Chicago area died in 1982 after taking Tylenol laced with cyanide.

   The mysterious deaths terrorized the country — and raised questions about the safety of the company’s products. But in what later became a business school case study, McNeil removed Tylenol from the market, offered refunds and eventually developed tamper-resistant pills. By the end, it had transformed a disaster into a public relations coup.

   McNeil’s marketing campaigns for its master brand were also skillful,burnishing Tylenol’s image while usually avoiding claims of absolute safety or zero side effects. One slogan: “The brand of pain reliever that doctors recommend more than any other.” Another: “Trust TYLENOL. Hospitals do.”

   “We never use the word ‘safe’ in our advertising,” said Anthony Temple, McNeil’s longtime medical director, in a legal case in 1993. “We will say ‘a superior safety profile’ or some language to suggest its relative safety to other” over-the-counter pain relievers.

   McNeil’s advertising budget for Tylenol has frequently exceeded $100 million per year: $115 million in 2003, according to Brandweek; $138 million in 2005, according to Advertising Age; and $162 million in 2008, according to Adweek. In 2004, marketing was the largest department in the company, employing about 150 professionals, McEvoy said in a court deposition.

   McNeil’s recent chief executives have often come from marketing backgrounds. Johnson & Johnson, a conglomerate of more than 250 companies, does not even place McNeil into its pharmaceutical division, which is responsible for prescription drug products. Instead, the company is part of the consumer division, along with shampoo, mouthwash and skin care products.

   Johnson & Johnson does not release sales figures for individual products, but Tylenol is the dominant acetaminophen brand in the U.S. Although the drug is available in cheaper generic forms, McNeil accounted for nearly half of all over-the-counter sales of acetaminophen, according to a 2010 McNeil presentation.

   Sales of acetaminophen by all companies have also grown. It became the nation’s most-used drug in the mid-2000s,according to surveys. In 2009, more than 27 billion doses of acetaminophen were sold in the U.S., most over the counter.

   Scott Olson/Getty ImagesOne way McNeil has reached ever-more households is through a marketing strategy known as line extension: targeting market niches by adding products, all under the halo of the Tylenol brand. Between 1988 and 2002, the company notified the FDA of plans to introduce 54 different kinds of packages, ranging from chewable tablets to coated pills, packed into bottles, pouches, cartons and blister packs.

   In the webcast interview, McEvoy, a marketing expert who rose into Johnson & Johnson’s corporate ranks, called Tylenol “a billion-dollar brand.”

   Internally, company officials refer to it simply as “the Brand.”

   The first reports of deaths from acetaminophen emerged in the late 1960s.

   Researchers subsequently learned that when the drug is broken down in the liver, it produces a potentially toxic byproduct. In an overdose, the liver can no longer safely dispose of the byproduct and can fail in a matter of days, shriveling like a deflated balloon.

   The concerns with acetaminophen emerged at a time when the American system for drug oversight was undergoing a sea change. Congress had passed a law in 1962 requiring the FDA to institute more rigorous testing for new drugs and to review the safety and efficacy of those already on the market.

   In 1972, as part of the review of existing drugs, the FDA assembled a group of doctors and scientists to assess painkillers, including acetaminophen.Over five years, the panel held 50 meetings, heard from scores of witnesses, and scoured thousands of pages of research – much of it submitted by drug makers themselves.

   As the panel’s work was going on, one of the world’s most prestigious medical journals weighed in on acetaminophen. The London-based Lancet declared in a 1975 editorial that if the drug “were discovered today it would not be approved” by British regulators. “It would certainly never be freely available without prescription.”

   The journal’s editorial board called the drug’s apparent safety “deceptive.” They pointed out that “not much more than the recommended maximum daily dosage” could cause liver damage and that acetaminophen poisoning was already “one of the commonest causes” of liver failure in Britain.

   Relatively few cases of acetaminophen poisoning had been documented in the United States. But an American study published in 1975 identified four acetaminophen-related deaths in one year in one city, Denver. The articlesuggested a reason why so few cases had previously been found: “If you do not look for something you will not diagnose it.”

   McNeil dispatched a top official to meet with one of the study’s authors. The company then gave him funding to help develop the acetaminophen antidote.

   Two years later, in 1977, the FDA’s expert panel delivered its 1,200-page report on pain relievers.

   While the committee found that acetaminophen was generally safe when used as directed, it warned that “some advertising for acetaminophen gives the impression that it is much safer than aspirin.” So the panelists urged the FDA to add a clear, specific warning to the acetaminophen label.

   The language the panel suggested: “Do not exceed recommended dosage because severe liver damage may occur.” The panel had only advisory power, but it felt so strongly that it told the FDA the warning was “obligatory.”

   Committee members wanted to drive home the potentially devastating consequences of taking too much acetaminophen, said Ninfa Redmond, a toxicologist who served on the panel.

   “We felt very strongly the evidence was conclusive,” Redmond said.

   For McNeil, the proposed liver warning put a lot at stake. Just the year before, Tylenol had become the No. 1 brand in the over-the-counter pain medication market, according to a company history.

   As McNeil prepared its response to the advisory panel’s recommendation, new reports of harm from the drug emerged.

   In September 1977, the Annals of Internal Medicine published articles about patients who suffered liver damage after taking acetaminophen for an extended period of time at or slightly above therapeutic doses, underscoring what the Lancet had said about the drug’s narrow margin for error.

   That December, McNeil filed a voluminous response to the FDA opposing the recommendation for a liver warning. It’s not known if the individuals who drafted the company’s filing were aware of the journal articles, but the company asserted that people who overdosed were “almost invariably” trying to kill themselves. Indeed, McNeil maintained it had never seen a “documented case” of a person harmed while taking the drug for medical reasons.

   A liver warning “is unnecessary and serves only to confuse and frighten the vast majority of consumers who use acetaminophen in a rational and appropriate fashion,” the company concluded. It also wouldn’t help consumers, the company said, because signs of liver damage often don’t emerge until it’s too late to get help.

   McNeil raised another objection: The warning would put it at a competitive disadvantage.

   Bayer, one of the world’s largest aspirin makers, had started running advertisements citing acetaminophen’s potential to harm the liver, based on the advisory panel’s recommendation. “Losses are already in the millions of dollars,” McNeil stated in its submission to the FDA.

   Almost a decade would pass without the FDA coming to any decision. While the label advised consumers to seek medical assistance if they overdosed, McNeil was able to sell its drug without warning that it could harm the liver. The agency’s decision was delayed, at least in part, because regulators extended deadlines to review new research.

   Redmond called such additional review unnecessary because the basic facts about the drug were well-established. She said she was mystified by regulators’ failure to act on the panel’s recommendation. “It’s very surprising, and it’s sad,” she said. “How many people might have died because of that?”

   Finally, in 1988, the FDA announced a “tentative” ruling. The agency agreed a warning was necessary but said there was no need to specify that the drug could injure the liver.

   The agency explained that it didn’t want people who were considering suicide to know what an overdose could do. And, it said, liver damage didn’t produce telltale symptoms for several days, when it was often too late for doctors to intervene.

   So it mandated a catchall warning: In case of overdose, consumers should seek prompt medical attention “even if you do not notice any signs or symptoms.”

   McNeil had won a reprieve from having to put a phrase on its bottles that company officials believed scared off buyers: “severe liver damage.” And the FDA would not return to the issue until many, many years later.

   As the FDA’s deliberations over the label crawled on, research began to emerge about the risks of drinking alcohol and taking acetaminophen — and McNeil took steps to counter the research.

   As early as the 1970s, an FDA panel had examined whether to put an alcohol warning on the acetaminophen label. In 1978, according to an internal McNeil memo, the company had been “successful in convincing” FDA officials “that such a warning was not indicated.” But the issue had not gone away.

   According to a corporate memo from February 1986, McNeil had test-marketed how consumers would interpret different versions of an alcohol warning. No matter how the warning was phrased, consumers reacted negatively: Most respondents concluded that drinkers should reduce or discontinue using Tylenol, even at recommended levels.

   The following month, the Annals of Internal Medicine published a study describing alcoholics who developed liver damage after taking “apparently moderate” amounts of acetaminophen.

   Two weeks after the article’s publication, a McNeil official issued a memo to Tylenol’s sales force warning representatives to “not initiate discussions with your physicians” about the danger of mixing alcohol and acetaminophen. A senior McNeil official would later testify in a deposition that the issue was controversial and complex. Sales reps, he said, were “not equipped” to discuss it.

   Then, in August 1987, a relatively obscure Swedish journal published a study on the dangers of drinking and taking acetaminophen.

   Thomas Gates, then McNeil’s medical director, shot off a memo to the chief executive of Johnson & Johnson, the president of McNeil and other top officials, laying out a detailed “plan of action” for “diffusing media interest” in the research and “limiting the extent and duration of the coverage.”

   Gates envisioned two possibilities: “Low Level of Publicity (most probable scenario)” and “High Level of Publicity (worst case scenario).” For the latter, Gates suggested a series of responses: a letter-writing campaign to medical societies, doctors, pharmacists and academics; a coordinated public relations response with the FDA; even placing on retainer scientists whose research the company favored.

   “If there is another wave of publicity,” Gates warned, “the FDA might be compelled to reconsider the matter and require a specific warning regarding a possible risk of toxicity in chronic alcohol abusers.”

   Gates, long retired from McNeil, was too ill to respond to questions, his wife said.

   Ultimately, the Swedish study received little attention.

   Gates’ memo summarized cases in the scientific literature over the previous decade that documented acetaminophen’s risk for drinkers. He wrote that 38 “chronic alcoholics” had reportedly suffered liver and/or kidney damage while taking acetaminophen. In just over half the cases, users substantially exceeded dosing limits.

   However, there were 18 instances in which they took less than 6 grams a day, not much more than the 4 grams considered safe, Gates noted. 

   He stressed that “the amount of acetaminophen ingested is open to question since alcoholics are notoriously unreliable informants.”

   But “if accurate,” he wrote, the amount of acetaminophen that harmed those 18 patients “bring us uncomfortably close” to the maximum recommended daily dose.

   Although McNeil had been preparing for the possibility that the FDA would require an alcohol warning, it took years before the agency publicly grappled with the issue.

   In 1993, the FDA convened an advisory panel to look at the risk of mixing alcohol and acetaminophen. Such panels are made up of outside experts. While the FDA does not have to follow their recommendations, it usually does.

   McNeil argued against the warning, saying the scientific evidence did not justify it and that it would frighten customers into taking other pain relievers that the company claimed were riskier.

   But the panel found that an alcohol warning was warranted. The chairman called the science behind it “unusually strong and well-supported.”

   At the same time, McNeil was seeking FDA approval for a new product, extended release Tylenol. Because it was a post-1962 drug, the agency could push for a warning with less red tape. It moved to do so on the new product, raising the possibility that regular Tylenol would have no alcohol warning but that the time-release product would have one.

   After the FDA approved extended release Tylenol with an alcohol alert in 1994, McNeil voluntarily added the warning to all Tylenol products.

   “After careful deliberation and discussion with the FDA, McNeil has made several label changes to Tylenol over the years — all for the purpose of eliminating potential confusion by consumers and protecting consumer safety,” the company wrote in response to questions. “A label change does not mean that a prior label was inadequate, and in fact label changes are an indication that our medical understanding is evolving.”

   Four years after McNeil acted, the FDA required all acetaminophen manufacturers to add an alcohol alert to their products. People who drank three or more alcoholic drinks every day were advised to consult their doctors and were warned that liver damage could occur.

   The warning label came too late for Antonio Benedi.

   Benedi, who worked as a special assistant to President George H.W. Bush, often drank two or three glasses of wine with dinner. On a Friday in February 1993, just weeks after Bush left office, Benedi came down with the flu. Over the next several days, he said, he took Tylenol, never exceeding the maximum dose.

   Benedi said he was careful to read labels. At the time, nothing on his box of Extra Strength Tylenol warned about the risk of drinking or liver damage.

   Several nights later, he woke up, confused and incoherent. His wife called an ambulance to rush him to a hospital near their home in the Virginia suburbs of Washington, D.C.

   By the time he arrived, Benedi had slipped into a coma. Tests showed his liver enzyme levels were high, a sign of organ damage. He had brain swelling, so doctors drilled a hole in his skull to relieve the pressure.

   After his third day in a coma, Benedi got a second chance at life. Doctors declared a young man taken to Benedi’s hospital after a motorcycle accident to be brain dead, and Benedi received the man’s liver.

   Benedi spent two months in the hospital, more than 200 surgical staples holding his abdomen together in a raw wound that looked like the Mercedes-Benz symbol.

   Almost two decades later, he still suffers from those few days of taking Tylenol. To keep his body from rejecting his transplanted liver, he had to take powerful medications that eventually destroyed his kidneys, requiring a kidney transplant.

   He sued McNeil. In court, the company argued that a virus had destroyed his liver and that the warnings on Tylenol’s label were adequate. The jury found for Benedi, awarding him an $8.5 million judgment in 1994. To this day, he will have nothing to do with Tylenol — he always tells doctors and nurses not to give him any.

   “I have nothing against corporations. They do a lot of good, employ a lot of people,” said Benedi. But “when a company omits a known danger to them that could hurt people, they’re lying to us. I think that is outrageous.”

   As Benedi’s case unfolded, McNeil was pressing ahead with a program dubbed Project Protect to create a safer version of acetaminophen.

   But the company kept the program, which has never been reported, confidential. Even when the government specifically asked for scientific information on developing a safer acetaminophen, the company didn’t mention its own research.

   The concept of such a drug was not new. The 1975 Lancet editorial had called for the development of a version of acetaminophen that wouldn’t harm the liver. In the United Kingdom, companies had developed drugs combining acetaminophen with one of its antidotes. But sales never took off — the drugs were too expensive, the pills were too large, and there were questions about the drugs’ safety.

   In the early 1990s, McNeil embarked on a series of experiments to combine acetaminophen with various protective agents. The effort involved almost 20 different lab and animal studies lasting several years, according to internal company documents and court records.

   As the experiments progressed, however, one official worried that the research could be a double-edged sword.

   A Johnson & Johnson manager based in Europe wrote to Ralph Levi, the head of Project Protect for McNeil, according to court documents. In his June 1994 note, the manager cautioned that a new, improved product touched on “a sensitive point,” because the company would be acknowledging that its existing product “isn’t so safe as we’ve always said before.” Levi has since died, and the court documents identified the manager only by his first name, Geert.

   To help keep Project Protect hidden, the company signed a confidentiality agreement with Rutgers University, where some of the research was conducted. A key clause: The publicly funded university agreed not to publicize “the identity or interest of McNeil in this area of technology.” Rutgers said such agreements were standard when researchers worked with companies.

   At least one line of research showed early promise, according to Rutgers documents, but there’s no public evidence that it or any Project Protect compound made it beyond laboratory or animal studies.

   McNeil’s work remained confidential even after the FDA became interested in that field of research. In 2006, as part of a larger review of acetaminophen, the agency solicited information about combining the drug with antidotes.

   In response, McNeil submitted a lengthy report citing 51 studies to document the drawbacks of such combinations. But the company did not mention that it had extensively researched the topic.

   FDA officials said McNeil wasn’t required to disclose its research in that response. Asked if the company had ever told the agency of its project, the FDA did not answer. “Those are the kind of things that we are always interested in knowing about,” said Kweder, the FDA’s acetaminophen expert. She added that even “if they didn’t show anything, it’d be useful to us to know if didn’t work scientifically.”

   In response to questions about Project Protect, McNeil acknowledged "research into acetaminophen overdose antidotes" but did not provide details. The company noted that confidentiality clauses are standard industry practice. It also said that the firm had complied fully with FDA reporting requirements.

   The company said it halted the research after discovering that the most promising agent “posed a cardiovascular risk for individuals with a particular genetic defect.” The company did not disclose the name of the agent.

   “Had the research yielded a viable discovery, our intention was to launch a product,” the company statement said. It continued: “Despite the outcome, we consider this type of research a responsible action on our part, and are proud of the many scientists who worked on it.”

   As McNeil quietly pursued a safer acetaminophen, a bespectacled, bow-tied Dallas doctor named Will Lee was pursuing research that would change the debate about the drug.

   In 1997, Lee published a groundbreaking paper in the New England Journal of Medicine showing that acetaminophen was the leading cause of acute liver failure at Parkland Memorial hospital in Dallas, despite the drug’s “apparent overall safety.”

   Not to be confused with chronic liver failure, such as that caused by alcoholism, acute liver failure is a sudden, often fatal condition that affects about 2,000 Americans each year.

   Among 21 patients who had overdosed on acetaminophen accidentally, Lee found, three reported that they had not exceeded the maximum recommended dose of 4 grams per day. Only seven said they had taken more than 10 grams.

   Following the article, the National Institutes of Health funded a larger study involving many of the country’s busiest liver transplant centers. Over the next 15 years, Lee confirmed that what he had documented in Dallas was true nationwide: Acetaminophen was the No. 1 cause of acute liver failure.

   Over the years, almost half of the people in the study had overdosed by accident, Lee found, not by trying to kill themselves. Many of those patients had other risk factors; about one-fifth drank alcohol frequently.

   One finding was downright counterintuitive: People trying to kill themselves with massive, one-time overdoses were more likely to survive than those who accidentally took too much.

   The reason? The chemical antidote to acetaminophen poisoning that McNeil helped to develop has a high success rate if administered within eight hours of an overdose. Those who attempted suicide and later regretted their action often made it to a hospital in time.

   Those who overdosed by accident were often unaware they had been poisoned. Their symptoms took several days to develop and resembled those of the flu, for which many of them had taken the drug in the first place. They were more likely to miss the window for the antidote.

   Acetaminophen has “not been recognized as a poison — that’s been part of the challenge,” Lee said. “It’s just like candy. If four is good, eight must be better.”

   McNeil disputed Lee’s findings, saying they had “serious methodological weaknesses,” such as relying upon patients to recall the amount of acetaminophen consumed.

   But other researchers came to similar findings. At the Hospital of the University of Pennsylvania, Dr. Sarah Erush and a colleague found that half of 46 patients treated for acetaminophen-related liver damage over four years had overdosed accidentally, not intentionally.

   The amount of acetaminophen these patients had ingested was close to the recommended daily dose of 4 grams. The median was 6 grams per day — a surprise, because the toxic dose was thought to be between 10 and 15 grams, Erush said. She also found that most of these patients had other risk factors, such as chronic alcohol use.

   Although she didn’t publish her research in a peer-reviewed journal, she presented it to the FDA.

   “For almost every patient with accidental exposure, we said, ‘Why did you take more than the recommended dose?’” Erush said in an interview. “They said two things: One, the label wasn’t clear, and, two, they always thought it was a perfectly safe drug.”

   McNeil said that it had asked Lee and Erush for patient information in order to examine their conclusions.  Both researchers said they had not provided McNeil such records, citing patient privacy issues.

   Lee’s research spurred the FDA to re-examine if the label on over-the-counter acetaminophen should explicitly warn about the risk of liver damage.

   The agency invited a grieving mother to tell her story at a public hearing.

   Flickr/WoodleyWonderWorks

   Craps dice advertise Tylenol with codeine

   Kate Trunk’s 23-year-old son Marcus had hurt his wrist in 1995 while working on a construction job in Pennsylvania. Over the next two weeks, he took Tylenol with Codeine and Extra Strength Tylenol. He started to feel sick and started on Theraflu — apparently not realizing that it, too, contained acetaminophen.

   Soon, Marcus felt bad enough to check himself into a hospital, where he lapsed into a coma. Eight days after Marcus entered the hospital, Kate and her husband decided to end life support.

   “We stayed with him and held him and talked to him and kissed him and petted him,” Trunk said. “He finally just went. It was total shock, walking around in a daze, not knowing, angry at God, angry at everything.”

   The mystified family did not find out the cause of Marcus’ death until the autopsy came back: liver failure caused by acetaminophen. The Trunks sued McNeil and settled for an undisclosed amount. McNeil did not respond to questions about the case.

   When the Trunks took their concerns to the FDA hearing, Kate was so nervous that her husband kept checking her blood pressure. But she delivered a call to action: She wanted acetaminophen clearly labeled to warn that the drug could poison and even kill.

   “If our son or my husband and I even had an inkling that acetaminophen toxicity existed, I feel that the outcome of our story would be totally different,” she said. She ended her testimony by saying that “death is not an acceptable side effect.”

   The committee recommended adding a warning aimed at all users, not just drinkers, that overdosing can damage the liver.

   This time, McNeil gave ground, agreeing with the need for a liver warning. “We believe with you that the American consumer is smart, responsible and can self-manage medications,” Dr. Debra Bowen, McNeil’s vice president of research and development, told the panel.

   By 2005, McNeil began placing labels on Tylenol warning that taking too much could result in “liver damage” for anyone, not just people who drank alcohol.

   In 2009, the FDA imposed stronger language, requiring all over-the-counter acetaminophen products to warn that overdosing may cause “severe liver damage.”

   The FDA’s wording was nearly identical to what its expert panel had recommended 32 years earlier.

   Asked about this time lag, the agency replied, “While we acknowledge that there has been some delay between available scientific information and the translation to labeling instructions for consumers, FDA has strengthened warnings on the acetaminophen label accordingly as science has evolved.”

   While McNeil agreed on the need to warn consumers of acetaminophen’s potential to harm the liver, it vigorously objected to the FDA’s plans to raise public awareness of that very risk.

   In 2004, the agency launched a modest public service advertisement initiative. The slogan: “Why is it important to know that all these medicines contain acetaminophen? Because too much can damage your liver.”

   A key problem the campaign hoped to address: double dipping, or overdosing by inadvertently taking more than one medication that contains acetaminophen.

   That risk had grown as McNeil and its competitors expanded the number of acetaminophen products on drugstore shelves. The drug was in medications targeted at consumers suffering all manner of ills, from colds to arthritis aches to insomnia caused by pain.

   The FDA didn’t have a lot of money for the 2004 campaign, just $20,000, according to an Associated Press story from the time.

   During this period, McNeil was spending more than $100 million a year to advertise Tylenol, trade publications reported.

   Nevertheless, McNeil launched an intense and lengthy effort to overhaul the campaign.

   The company sent a 79-page complaint demanding that, if left unchanged, the FDA’s educational campaign would “negatively affect McNeil, the world’s largest marketer of OTC acetaminophen products.”

   Indeed, the complaint said, the FDA should speed up its review “in order to limit the damage that is being done” by the nascent campaign.

   McNeil wanted the FDA to include warnings about other over-the-counter pain relievers, arguing that they posed risks at least as serious as acetaminophen. The FDA’s initiative, the company contended, created the false impression that “acetaminophen products are less safe” than other over-the-counter painkillers and could spur consumers to switch to other pain medicines, resulting in more injuries and deaths – a frequent McNeil argument.

   The FDA’s Steven Galson, then the acting director of the agency’s Center for Drug Evaluation and Research, disagreed.

   Doubling the maximum daily dose of over-the-counter pain killers such as aspirin or ibuprofen “may slightly increase a person’s risk for bleeding,” in the stomach and gastrointestinal tract, he wrote, but “it is not even close to the seriousness presented by doubling the dose of acetaminophen,” which can lead to liver failure.

   McNeil took its case all the way to the FDA commissioner, who turned down the company’s final appeal, saying the agency had “refuted each example to respond to your allegation.”

   McNeil did not respond directly to questions about its opposition to the campaign.But it stressed that it had launched numerous acetaminophen safety education efforts, both on its own and with industry and government partners. Altogether, McNeil said, these “acetaminophen awareness messages have been seen over one billion times.”

   Although the agency had prevailed, its safety initiative fizzled. Major media outlets were reluctant to run the public health announcements. Magazine publishers told agency officials that they “did not want to antagonize potential advertisers,”according to an FDA report.

   The FDA concluded that its campaign “did not appear to have a significant impact on the problem.”

   Indeed, a nationwide poll this year shows that many Americans don’t recognize the risk of double dipping.

   Thirty-five percent of respondents said it was safe to take the maximum recommended dose of Extra Strength Tylenol with NyQuil, a cold remedy that also contains acetaminophen. The margin of error was 3.5 percentage points.

   Among parents, 35 percent thought it was safe to give a child the maximum dose of Children’s Tylenol with Children’s Tylenol Plus Multi-Symptom Cold, both of which contain acetaminophen. The margin of error for the parents’ subgroup was 6.7 percentage points.

   YouTube/xntryk1

   1982 Children's Tylenol commercial: "I was never sure just what to give him. Then I found out what more pediatricians give their own kids: Children's Tylenol."

   In both these examples, mixing the two medicines would not be safe, according to the FDA.

   (The survey of 1,003 respondents – conducted by Princeton Survey Research Associates International and commissioned by ProPublica and This American Life – was completed in March.)

   With the public education campaign faltering, the FDA regrouped in 2006 and convened a team to examine the agency’s handling of acetaminophen — including what a former top official described as “the interactions between the FDA and McNeil over this 30-year history.”

   Officials reviewed the science, the reports of deaths and side effects, and the long history of regulatory delays. The 265-page report that emerged was both a blunt assessment of the drug’s dangers and a plan for mitigating them.

   Officials concluded that deaths from acetaminophen poisoning had risen dramatically over the decade between 1995 and 2005. They zeroed in on how the drug differed from other over-the-counter pain relievers.

   “The 4 gram per day recommended dose is also the maximum safe dose, one that must not be exceeded, an unusual situation for any drug, particularly an OTC drug, one placing a large fraction of users close to a toxic dose in the ordinary course of use,” the report said.

   Officials proposed more than a dozen solutions, including several aimed at widening the drug’s safety margin, such as lowering the maximum recommended daily dose and reducing the amount of the drug in each pill. The report also suggested removing an entire class of pediatric products to reduce the potential for dosing mix-ups.

   Taken together, the proposals constituted a blueprint for sweeping safety reforms.

   At the same time, the FDA officials who wrote the report gave a candid assessment of the fierce resistance they expected from drug makers to certain proposals.

   To the notion of lowering the recommended daily dose, the agency expected a “possible industry challenge.”

   To the proposal to decrease the amount of acetaminophen per pill, the report anticipated “possible industry resistance to costs related to reformulation” and to “possible loss of revenue from elimination of 500 mg products.”

   In June 2009, the agency gathered nearly 40 experts in a Maryland Marriott to weigh in on its recommendations. Everyone in the room, including executives from McNeil and other companies, knew the stakes.

   Edwin Kuffner, McNeil’s medical director, had prepared for the meeting by attending some 100 practice sessions with a consulting company that specialized in readying corporate clients to speak before the FDA, according to a court deposition.

   Kuffner objected to dropping the daily recommended dose below 4 grams. For decades, the company’s labels had advised users to take no more than 1 gram, or the equivalent of two Extra Strength Tylenol pills, at a time. He suggested directing consumers to take one pill at a time until they felt pain relief, gradually easing up to a maximum of 4 grams a day only as necessary. Even though a company document calls this practice “good medicine,” McNeil has not added this instruction to Tylenol labels.

   When it came time to vote, Judith Kramer, a physician and professor of medicine at Duke University, reminded her fellow panelists of the opportunity before them, noting that attempts to make acetaminophen safer had foundered for decades.

   “There is an elephant in the room that we really should talk about explicitly,” she said. “There are tremendous cost and commercial implications to some of the recommended changes. These conditions frequently can overshadow the public health considerations. And I think that we can't let that happen.”

   The panel handed McNeil a defeat, endorsing most of the FDA’s proposals.

   But then, the agency’s momentum stalled.

   Four years later, the agency has not enacted any of its own suggestions for over-the-counter acetaminophen.

   In fact, the FDA has still not completed the review of the drug that began back in the 1970s, as part of the agency’s larger mandate to assess the safety and efficacy of older medicines.

   In interviews, FDA officials acknowledged that it has taken longer than it should. They blamed a combination of science and bureaucracy.

   Despite 50 years of sales and more than 30,000 published papers, there remain unknowns about acetaminophen. In a little-publicized 2011 announcement, the FDA acknowledged it was still unable “to identify precise toxic thresholds and/or specific populations for whom currently recommended dosages are not safe.”

   A Canadian government study found six people had suffered serious liver damage after taking less than the maximum recommended dose. By contrast, a case report described a man who survived after ingesting as much as 60 grams all at once. In response to questions, McNeil first wrote in an email that 8 grams, or double the maximum daily dose, over several days can damage the liver. Later, when asked to confirm this figure, the company declined to do so. It pointed to data showing that at least 10 grams a day for at least 2 to 3 days can threaten the liver.

   Setting the right dose “has been one of the big challenges for us,” the FDA’s Kweder said. “There is so much disagreement among experts who are well respected and can present data on where they’d draw that line.”

   Agency officials also said that McNeil has often resisted changes.

   McNeil was “more aggressive than most,” a former top FDA official said. “It’s a company that feels very strongly about the competitive nature of the marketplace.”

   McNeil countered: “Our marketing practices are appropriate and align with the regulatory standards for our industry.”

   It also added that the company had a “deep respect for the Food and Drug Administration (FDA) and its role in establishing and enforcing regulations” and noted that it has voluntarily implemented some safety measures before the agency required it to do so.

   The FDA delays are, at least in part, self-inflicted.

   The agency said that the procedure it set back in the 1970s for revising rules for older drugs "was not rapid, but there were many fewer steps to the process that today is long." Indeed, actions that were supposed to take months have dragged on for years or even decades.

   For prescription drugs, the FDA can act more swiftly, and it has limited the amount of acetaminophen in such medicines.

   In 2011, the FDA limited the amount of acetaminophen that can be put in prescription drugs to 325 milligrams per pill, and gave companies until January 2014 to implement the change.

   Yet the agency continues to allow the sale of over-the-counter pills that contain up to 650 milligrams of acetaminophen — twice as much.

   Asked why it permits such potent pills to be sold directly to consumers, an FDA official said the agency “believes there is a benefit to having acetaminophen available.”

   In addition to lowering the dose per pill, the FDA slapped prescription acetaminophen with a so-called black box warning, the agency’s most serious. It states that “acetaminophen has been associated with cases of acute liver failure, at times resulting in liver transplant and death.”

   The label for the over-the-counter version of the drug, taken by far more Americans, mentions neither of those potential consequences.

   The agency’s disparate actions on prescription and over-the-counter acetaminophen have given rise to glaring inconsistencies.

   Tylenol with Codeine No. 3, made by a Johnson & Johnson company, combines acetaminophen with codeine, which can be bought only with a prescription. Tylenol 3, as it is commonly known, carries a black box warning about acetaminophen, and each pill contains 300 milligrams, less than the new limit of 325 milligrams.

   By contrast, a single pill of Extra Strength Tylenol — sold at newsstands, gas stations and big-box retailers across the land — delivers 500 milligrams of acetaminophen. The bottle carries no black box warning.

   Two pills, containing the same medication, made by the same corporation, carrying the same brand name, regulated by the same agency – but subject to different standards.

   While the FDA remains stuck on rules for over-the-counter acetaminophen, McNeil has reversed course on one major proposal.

   Just a month after adamantly opposing dosing reductions at the 2009 advisory committee meeting, McNeil wrote top FDA officials, offering a plan that recognized the will of the advisory committee.

   Although the company had insisted for half a century that 4 grams of medicine per day was the most appropriate dose for pain relief, the company said it was ready to recommend taking no more than 3 grams a day (or six pills) of its flagship product, Extra Strength Tylenol. The company implemented the change in 2011.

   The move echoed other instances, such as the alcohol warning, in which the company opposed safety proposals until the FDA signaled its intent. Then the company adopted measures voluntarily as the agency plodded toward final rules.

   Kuffner, McNeil's vice president for medical affairs, said in an interview that the company changed its dosing instructions “after hearing the discussion” at the 2009 advisory committee. The lower dose is “intended to increase the margin of safety,” he said.

   McNeil hasn’t standardized the new daily dose across all its products, however. For Tylenol Arthritis Pain, the company’s label puts the daily limit at 3.9 grams. And the company didn’t change the dose for customers worldwide. In Canada and other countries, the company still instructs users of Extra Strength Tylenol that they can take up to 4 grams a day — eight pills.

   Kuffner said the “root causes” of acetaminophen overdose differ from region to region.

   “The safety of consumers in every region is important to us. When you really go back and look at root causes, some of the root causes weren’t as prevalent as in other regions,” he said. “There are differences in the prevalence of acetaminophen overdose and liver injury.”

   “At the end of the day, when people take 4 grams or 3 grams, both of them are safe doses,” Kuffner said.

   The FDA had said it would issue proposed rules for over-the-counter acetaminophen by the end of August. But the agency missed that deadline, pushing it back to December.

   Dr. Thomas Garvey, a former FDA official and drug industry consultant who has testified against McNeil in trials, called the amount of time the FDA had taken to reach a final ruling “remarkable and unusual.”

   “There are still many questions about this drug,” Garvey said. “It’s still killing people.”

   In many other countries, authorities have taken a very different approach to regulating acetaminophen.

   At least 10 other industrialized countries — including Australia, New Zealand, Germany, Finland, Denmark, Sweden and Switzerland — have placed some kind of restrictions on the drug, a 2008 FDA report said. Most limit how much can be sold at one time or require pharmacies to be the only outlets that carry it.

   Some European countries with strict regulations have remarkably few deaths. Switzerland’s national toxicology center reported only four deaths due to acetaminophen poisoning from 1998 through 2012. Even accounting for Switzerland’s much smaller population, that’s a fraction of the U.S. toll.

   The German government reported four deaths from acetaminophen poisoning in 2010, the same year the CDC put the American total at 321. The U.S. population is four times that of Germany.

   Both Switzerland and Germany limit sales to pharmacies, which sell packages with a maximum of 10 grams, the equivalent of 20 Extra Strength Tylenol pills.

   In many nations, authorities were focused more on reducing suicides than on preventing accidental overdoses. In the U.K., for example, acetaminophen had become a common suicide method by the 1990s. The drug was easy to get: In drug stores, it could be purchased in unlimited quantities.

   In 1998, the U.K. cracked down on several types of pain relievers, including acetaminophen. At pharmacies, people could buy the equivalent of only 32 Extra Strength Tylenol pills. At other stores, they were limited to half that.

   Here was a real-world experiment of the effect of restricting acetaminophen. Early studies were somewhat contradictory, but this year, a large study concluded that the number of deaths linked to acetaminophen had plunged by 43 percent. In the 11 years since the restrictions took effect, the researchers estimated, 765 fewer people had committed suicide using the drug.

   While the new regulations may have saved lives, they hurt sales. The amount of acetaminophen sold in the U.K. plunged by 60 percent from 1998 to 2000, according to a study by the FDA. The agency noted that such restrictions would be more difficult to implement in the U.S. because it has a different commercial, regulatory and medical culture than Britain and many European countries.

   Indeed, here there has been only limited debate about restricting the amount of acetaminophen consumers can buy.

   A proposal to limit package sizes — how many pills could be put in a bottle, for example — was considered by the advisory panel convened by the FDA in 2009. In a close vote, it failed. Some of the experts worried that patients suffering from arthritis would be inconvenienced by having to make repeated trips to buy the drug.

   Several committee members said they had struggled with their vote.

   “I hope the FDA doesn't consider this ‘no’ vote to mean that we support selling 1,000 acetaminophen tablets in Costco,” said Kramer, the Duke University professor.

   Over the past several years, McNeil and Tylenol have suffered a series of body blows related not to acetaminophen’s risks but to the company’s ability to manufacture its drugs safely. The headlines might have killed a lesser product, but have only underscored the extraordinary resiliency of the Brand.

   Between 2008 and 2010, federal regulators discovered an array of troubling manufacturing violations at McNeil’s plants, triggering a series of recalls of Tylenol and other products such as the company’s Motrin brand of ibuprofen.

   For example, to make Tylenol syrup for infants and children, the company used an ingredient that was possibly contaminated by dangerous bacteria. The company said “a thorough investigation” showed the bacteria had not reached its medicine. However, the FDA found that McNeil’s tests — skimming a teaspoon off the top of a container of liquid — were inadequate.

   Later, agency investigators also discovered that Tylenol and other products had been contaminated by tiny bits of cadmium, nickel, chromium, iron and other metals, most likely shavings that fell into the medicine from machines on the production line.

   Again, McNeil officials saw little cause for concern. “We are talking minute particles,” one McNeil employee told FDA officials. “We are talking contaminants you don’t want to be there!” an inspector replied, according to previously unreported notes taken by McNeil.

   The company itself determined that it had manufactured batches of what the FDA called “super potent” Infants’ Tylenol with up to 23 percent more acetaminophen than was supposed to be in it. It is not known if any reached the market.

   On April 30, 2010, the FDA issued a formal inspection report with a litany of deficiencies. The same day, McNeil pulled 136 million bottles of pediatric Tylenol and other medicines off the market.

   It was the largest recall in the history of pediatric medicine.

   Subsequently, the Department of Justice launched a civil investigation that effectively gave the FDA power to direct the cleanup of McNeil’s troubled plant in Fort Washington, Pa. The FDA has not tied any recalled product to individual cases of harm.

   Congress hauled in company executives for two public hearings. William C. Weldon, then chairman and chief executive of Johnson & Johnson, told lawmakers the company had “let the public down” by not maintaining high quality control standards.

   “We are working hard to restore the public’s trust and confidence in Johnson & Johnson and to strive to ensure that something like this never happens, ever again,” Weldon said.

   By the end of 2010, the recalls had cost McNeil approximately $900 million in sales, it reported. Many Tylenol products vanished from the shelves for months. The company recently acknowledged that it faces federal investigations related to the recalls; it said it is cooperating with the probes. The company’s Fort Washington plant remains closed.

   Meanwhile, McNeil has faced new court challenges about the risks of its billion-dollar brand.

   In the past few years, about 100 lawsuits have been filed, contending that McNeil has failed to adequately warn the public about the true danger of Tylenol. Most of the lawsuits have been consolidated before a federal judge in Philadelphia. McNeil is fighting the claims, saying its warnings were adequate. Many of the cases allege that consumers suffered injury or death after taking Tylenol at or near the maximum recommended daily dose.

   After enduring all the negative headlines about its manufacturing plant, getting hit with scores of lawsuits, and even being removed from some markets for months, Tylenol retains its power as a brand — a testament to the decades of skillful marketing.

   In Johnson & Johnson’s July earnings call, top officials said McNeil’s over-the-counter revenue had surged by 26 percent. Children’s Tylenol was one of the top two brands in over-the-counter pediatric pain relief.

   And the company’s flagship product? Extra Strength Tylenol had doubled its market share in the first half of 2013.

   Once again, it was America’s No. 1 over-the-counter adult pain medicine.

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4. J&J Agrees to Pay $22.9 Million to Settle on Drug Recalls

   Jul 17, 2013 | Bloomberg

   By David Voreacos and Jef Feeley

   Johnson & Johnson, the world’s largest maker of health-care products, agreed to pay $22.9 million to settle a lawsuit claiming it misled investors about quality-control failures that led to recalls, according to court papers.

   The proposed settlement, filed July 15 in federal court in Trenton, New Jersey, would resolve claims that the failures led to the largest recall of over-the-counter children’s medicine in U.S. history, a plant closing and a congressional probe. The group, or class-action, accord still needs a judge’s approval.

   The case focused on recalls of over-the-counter drugs made by J&J’s McNeil Consumer Healthcare division in Las Piedras, Puerto Rico, and Fort Washington, Pennsylvania. Investors claimed that J&J and its executives made misleading statements about details of the recalls and that they suffered stock losses after the true reasons for the recalls became public.

   “The proposed settlement is a favorable recovery for the class especially when viewed in light of the significant risks posed by continued litigation,” according to the filing.

   J&J will make no admission of wrongdoing, according to a joint filing by investors and the company.

   “We maintain that the claims in this action are without merit, and settled this case in order to avoid the expense, distraction and time associated with continuing litigation,” Ernie Knewitz, a spokesman for New Brunswick, New Jersey-based J&J, said in an e-mail.

   The settlement would cover buyers of J&J shares between Oct. 14, 2008, and July 21, 2010. It follows mediation by a retired judge, Daniel H. Weinstein, according to the filing.Suit Dismissed

   J&J claimed that investors were unable to prove the materiality of alleged misstatements and omissions or how they caused shares to drop, and that company executives acted in good faith. A judge’s ruling had meant “there was a great likelihood” that the class asserted “would have been substantially curtailed,” according to the filing.

   U.S. District Judge Freda Wolfson previously dismissed a similar suit claiming that J&J directors ignored “red flags” foreshadowing product recalls and government probes of manufacturing defects and marketing practices.

   Recalls dogged J&J for two years, led by the withdrawal of more than 40 brands of children’s Tylenol, Motrin and other medicines with foul odors or faulty ingredients. J&J shut one factory for an overhaul and signed a consent decree expanding U.S. oversight at three plants.

   The case is Monk v. J&J, 10-cv-04841, U.S. District Court, District of New Jersey (Trenton).

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5. CVS stops putting Tylenol in some stores to end supply holes

   Jan 14, 2013 | Reuters

   By Brad Dorfman

   If you cannot find Tylenol pain reliever at your local CVS store this flu season, it might be because that store is no longer stocking it.

   CVS this month changed how it stocks Tylenol at its stores in the wake of manufacturing problems at the drug's maker, Johnson &Johnson, that have disrupted supplies for more than three years.

   Under the new plan, CVS will try to have Tylenol in stores in each market, but will not have it in every store, spokesman Michael DeAngelis said.

   The company is getting enough Tylenol to stock about half of its 7,400 U.S. stores, and it changed the stocking of Tylenol to eliminate empty spots on shelves where the medication would have been.

   The move by the drugstore unit of CVS Caremark Corp, the second largest such unit in the United States, could be a sign of the difficulty J&J faces as it tries to fix quality-control problems and rebuild its Tylenol business.

   A spokesman for J&J's McNeil Consumer Healthcare unit, which makes Tylenol, did not return Reuters' calls seeking comment.

   Since 2009, faulty manufacturing has prompted J&J's McNeil unit to recall millions of bottles and packages of Tylenol, Benadryl, Motrin and other over-the-counter medicines.

   At the same time, CVS and other retailers have been putting more emphasis on their private-label products, which cost less than brand-name products but can be more profitable for retailers.

   The length of time it has taken for J&J to upgrade its factories and ramp up manufacturing of Tylenol has given consumers plenty of time to try the store brand and decide whether they want to pay more for Tylenol, Stephanie Prymas, Consumer health analyst at market data researcher Euromonitor International, said.

   "That's a pretty long time for private-label to gain some credibility," Prymas said.

   In 2009, before the recalls started, Tylenol had 56 percent of the U.S. market share for acetaminophen, the chemical name of Tylenol, according to Euromonitor. In 2012, that was down to 24 percent. At the same time, private-label market share has grown from 32 percent to 62 percent.

   Prymas said that private-label products are more accepted now than 20 years ago, when deaths linked to cyanide-tainted capsules caused Tylenol to be pulled from store shelves. Private-label offerings are now more commonplace and trusted, she said.

   "We're kind of expecting private label to hold on more tenaciously to what they have captured," Prymas said.

   A visit to a CVS store on Chicago's North Side on Sunday showed no obvious signs that Tylenol extra strength pain reliever for adults had ever been on the shelves or any spaces for the medication had to be restocked. Instead, the shelves were well-stocked with the CVS brand.

   DeAngelis declined to say whether the supply of Tylenol had changed in recent weeks to prompt the new distribution plan.

   A spokesman for Walgreen Co, the largest U.S. drugstore chain, said that company has seen no change in its supply of Tylenol products.

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6. Why J&J Is Behind Schedule Reviving Its Consumer Business

   Apr 18, 2012 | Forbes

   By Ed Silverman

   If you were wondering why the befuddled Johnson & Johnsonexecutive team had to postpone the rebirth of its troubled FortWashington, Pennsylvania, facility, consider this simple analogy. Imagine an old kitchen that was used to make great food, but once-exquisite meals gradually became horrible – tasty dishes began smelling funny and looking bad on the plate. You sometimes got the runs or, still worse, food poisoning.

   To remedy the problem, the kitchen undergoes more than an expensive remodeling; the equivalent of a culinary teardown takes place. The end result is a shiny new bistro ready for an Iron Chef showdown. But after all the time, expense and fuss, some of the same recipes are, more or less, still used. This creates a conundrum as both processes and equipment must be re-examined before everything can be considered kosher, so to speak.

   This may oversimplify things a bit and certainly not explain all of the problems that J&J is confronting at its key over-the-counter manufacturing plant, which contributed greatly to numerous product recalls and an embarassing consent decree (see here). But rebuilding an entire plant takes a lot of effort and tech transfer can be an imperfect science if the underlying processes were problematic in the first place.

   Of course, hindsight, as the cliche goes, is a wonderful thing. But the J&J team was displaying what can only be considered corporate hubris when they promised that the Fort Washington plant would be back in business later this year. Unfortunately, investors wanted to believe that J&J execs – who have generally exhibited impressive skills for managing financial results as needed – would have the same ability to make facts on the ground go their way.

   Wall Street is now facing the sober reality. “The closed Ft. Washington plant is not expected to re-open until 2014, assuming successful FDA inspection starting later 2013. Additionally, remediation cost are higher than anticipated,” writes Wells Fargo Securities analyst Larry Biegelsen in an investor note this morning. “We note the slow recovery is somewhat disappointing and likely remains an overhang” on the stock.

   The extent of the remediation costs are unclear, but J&J has had a small army of consultants, including experts from the Quantic Group, on the premises for quite some time. Meanwhile, sales of the McNeil Consumer Healthcare business are falling – a 2.4 percent drop was registered in the first quarter and every product segment in the unit experienced revenue setbacks (look here).

   Nonetheless, J&J still managed to beat Wall Street expectations when earnings were released yesterday. Even though companywide sales slipped, there are various reasons for this accomplishment. J&J, after all, is much more than a consumer goods purveyor. Beigelsen, for instance, pointed to “organic” sales growth in the pharmaceuticals business. There was also lower-than-expected R&D spending overall, reportedly due to the timing of milestone payments to others.

   But the results underscore how J&J execs can manage the numbers to compensate for faulty predictions. “We always believe that quarterly J&J numbers are not meant to be looked at too closely given the company’s amazing reporting flexibility, many moving pieces, and the resulting ability to ‘make numbers,’ writes Leerink Swann analyst Rick Wise in an investor note. “Lower spending in one period may be accelerated later. But clearly taken in isolation, (earnings per share) would have been markedly different without the low R&D spend.”

   Meanwhile, the longer it takes to rework the Fort Washington plant, the more difficult it will become to regain lost shelf space. And that further depresses the sales outlook. This will be a key priority, of course, for Alex Gorsky, who was just promoted to succeed the embattled Bill Weldon as ceo. Whether Gorsky can resurrect McNeil remains to be seen. Unfortunately for him, Gorsky may be distracted by depositions involving yet another J&J scandal – his managerial responsibility for a widely publicized kickback case involving the Omnicare nursing home pharmacy (read this).

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7. J&J quarterly profit beats forecast, but sales lag

   Apr 7, 2012 | Reuters

   By Ransdell Pierson and Lewis Krauskopf

   n">Declining sales dogged Johnson & Johnson (JNJ.N) in the first quarter, illustrating the company's struggle to revive growth in all three of its main businesses and tough challenges ahead for incoming Chief Executive Officer Alex Gorsky.

   Gorsky, a company vice president, on April 26 takes the helm of J&J, which for most of the past century has posted dependable double-digit annual profit growth.

   "Gorsky's toughest challenge will be to turn the corner on manufacturing issues," said Morningstar analyst Damien Conover, referring to quality-control lapses at its factories that have sparked recalls of Tylenol and many other over-the counter products since 2010.

   "J&J initially had high hopes of making a big dent in fixing the problems by 2011, but then pushed it back to 2012 and then 2013 and it could go to 2014."

   First quarter company revenue fell slightly on anemic sales of consumer medicines and its medical devices - another business that has been hit by costly recalls in the past two years.

   Net earnings rose to $3.91 billion, or $1.41 per share, from $3.48 billion, or $1.25 per share, a year earlier. Excluding special items, J&J earned $1.37 per share, topping the analysts' average forecast of $1.35 a share, according to Thomson Reuters I/B/E/S.

   Revenue slipped 0.2 percent to $16.14 billion, while Wall Street expected $16.26 billion. J&J said sales would have risen 1 percent if not for the stronger dollar, which lowers the value of sales in overseas markets.

   Company shares, which were little changed in afternoon trading, have barely budged in the past two years, amid moderate gains for the drug sector and 15 percent growth for the Standard & Poor's 500 stock index .SPX.

   Sales of J&J consumer products, including its over-the-counter medicines, slipped 2.4 percent to $3.6 billion in the first quarter.

   Conover said the McNeil consumer healthcare unit that makes the OTC brands had peak sales of $5.9 billion in 2008, representing more than 9 percent of total company revenue. The unit's sales last year dropped to $4.4 billion, or only 6 percent to 7 percent of company revenue, as a giant plant in Fort Washington, Pennsylvania remained down for repairs.

   "Manufacturing problems always plague companies longer than they expect," Conover said. "But once McNeil regains full capacity, if its products regain market share they could generate a 2 percent boost in company earnings."

   Profits have also been hurt by generic competition for its prescription drugs. The company has also had to grapple with a weak global economy that has cut demand for elective surgeries and therefore for its vast array of medical devices and diagnostics.

   "Utilization of medical products has not been exactly robust for J&J or the (device) industry, and Gorsky can't change the global economy," said Les Funtleyder, portfolio manager for Miller Tabak & Co. "So if they don't see a pickup, they'll have to find other sources of growth -- either expanding use of current products or finding new products."

   The quarter was "a little light on revenue, especially in the consumer and device businesses," Gabelli & Co analyst Jeff Jonas said. But he added that the company had impressively controlled sales, general and administrative costs, as well as spending on research and development.

   "That's something they've been promising for a long time and we haven't really seen until now," Jonas said.

   Jonas said the company's new Zytiga prostate cancer treatment was a standout performer in the quarter.

   "That's definitely going to be a billion-dollar-plus drug," he said, adding that HIV drugs also did well.

   Global sales of prescription drugs rose 1.2 percent to $6.1 billion in the quarter, held back by generic competition for J&J's Levaquin antibiotic and Concerta treatment for attention deficit disorder.

   Medical device and diagnostic sales slipped 0.3 percent, weighed down by J&J's discontinuation of drug-coated heart stents and widely publicized recalls of its faulty DePuy ASR hip replacement products.

   J&J took charges of more than $3 billion in January, largely for recalls of the DePuy devices and also for litigation involving allegedly improper marketing of its Risperdal schizophrenia drug.

   Citing positive current foreign exchange rates, J&J slightly lifted its full-year profit forecast, to between $5.07 and $5.17 per share, from its earlier view of $5.05 to $5.15 per share. The company earned $5.00 a share last year.

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8. Johnson & Johnson CEO resigns after series of missteps

   Feb 21, 2012 | CNN Money

   By David Goldman

   Johnson & Johnson CEO Bill Weldon will step down in April, the pharmaceutical giant announced Tuesday.

   Alex Gorsky, J&J's head of pharmaceuticals in Europe, the Middle East and Africa, will take over in Weldon's place. Weldon will remain the company's chairman.

   Weldon, who was with the company for more than 40 years, was for a long period one of the most respected executives in the drug industry. But a series of missteps over the past two years damaged his and his company's once sterling reputations.

   Recall after recall hit J&J (JNJ, Fortune 500) division McNeil Consumer Healthcare, culminating in the Food and Drug Administration's takeover of three of the company's factories that manufactured Tylenol last March.

   Over the past two years, J&J recalled numerous over-the-counter drugs, including Topomax (odor), Mylanta (undisclosed alcohol), Tylenol (musty smell), and hip implants (required more surgery).

   In May 2010, U.S. lawmakers unveiled documents that showed J&J hired contractors to conduct a clandestine recall of more than 88,000 Motrin tablets.

   In April 2010, McNeil recalled 135 million bottles of children's and infant's Motrin, Tylenol, Benadryl and Zyrtec drugs for quality issues. It was the largest recall of children's non-prescription drugs.

   It wasn't just recalls that hit J&J. The FDA also warned the drug maker among others that it issued false claims about its Listerine mouthwash.

   Last April, the Securities and Exchange Commission charged Johnson & Johnson with bribing doctors in several countries to prescribe its drugs and medical devices.

   "J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, off-shore companies, and slush funds to cover its tracks," Robert Khuzami, director of the SEC's enforcement division, said at the time.

   Weldon has been with the company since 1971, moving up the ranks and through various departments, including sales, marketing and international management. He was named CEO and chairman in 2002.

   Gorsky will become just the company's seventh CEO since its founding in 1886.

   "Alex is an experienced, visionary and disciplined leader," Weldon said in a prepared statement. "I look forward to the transition of leadership and to a bright future for Johnson & Johnson."

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9. Infant Tylenol Recall: Johnson & Johnson Recalls Medicine Over Bottle Design Problems

   Feb 17, 2012 | AP/Huffington Post

   By Linda Johnson

   Recall-plagued Johnson & Johnson is pulling all infant Tylenol off the U.S. market because some parents have had problems with redesigned bottles, introduced three months ago, that the company touted as a big safety improvement to make measuring doses easier.

   Instead, 17 parents or caregivers have complained that a protective cover on the top of the bottles didn't work correctly. It's meant to limit how much of the liquid pain and fever reducer can be drawn into a plastic syringe. But when those consumers inserted the plastic syringe, it pushed the protective cover, or flow restrictor, into the bottle.

   J&J's McNeil Consumer Healthcare unit, which has had about 25 product recalls since September 2009, said Friday that it is recalling all 574,000 bottles of grape-flavored, liquid Infants' Tylenol from stores nationwide.

   "Today's news about the Infants' Tylenol recall is clearly disappointing after all the progress that McNeil has been making to ensure its products meet the highest level of quality and consumer satisfaction," CEO William Weldon said in a statement.

   Last spring, Weldon told shareholders at J&J's annual meeting that the company was simplifying the packaging to "help a mom, dad or caregiver ensure the correct dosing." Weldon told The Associated Press then that he thought the new design would become the industry standard.

   Infants' Tylenol is one of the first nonprescription medicines reintroduced after all the recalls and an ongoing factory shutdown have kept most McNeil medicines off the market, some for nearly 2 years. That's cost the company well over $1 billion in lost revenue, plus many millions to rebuild one factory and upgrade others.

   McNeil spokeswoman Bonnie Jacobs said it was too soon to say when the product will return to the market.

   "We are looking at various alternatives for the redesign of the dosing system and will set a timeline ... once we've reviewed all the options," she said.

   While babies are particularly vulnerable to excessive doses of medicine, J&J said there have been no reports of anyone being harmed.

   The new infant Tylenol bottle comes with a plastic syringe that's to be inserted into the flow restrictor at the top to help measure the right dose. The syringe has an opening in the tip but no needle. Consumers are to insert the tip of the syringe into the flow restrictor, turn the bottle upside down and then draw out the right dose using the milliliter markings on the syringe. That's then squirted into the baby's mouth.

   McNeil changed the design to make it easier to get the dose right and to limit spillage if the bottle is knocked over, McNeil spokeswoman Barbara Montresor said. The prior version had an open-topped bottle and a dropper with a flexible bulb at the top, similar to a turkey baster.

   McNeil is part of the consumer health business segment at J&J, which is based in New Brunswick, N.J. The company's prescription drug and medicial device divisions each have issued at least two recalls in the last couple years.

   Reasons for the recalls have included nauseating package odors, small glass or metal particles in liquid medicines and wrong levels of active ingredients.

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10. J&J Still Sees Impact of McNeil Recalls, But Brands Are Coming Back

    Jan 24, 2012 | Wall Street Journal

    By Katherine Hobson and Peter Loftus

    Johnson & Johnson avoided a third consecutive year of sales declines in 2011 — sales rose 5.6%, to $65 billion, last year, according to the company’s latest financial report, out today.

    Still, as the WSJ reports, the company is still feeling the impact of quality-related recalls over the past two years. In 2010, the string of recalls at J&J’s McNeil businesscost it about $900 million in sales.

    The company didn’t do a similar break-out for 2011. However, as you can see from the financial results, sales at its U.S. over-the-counter/nutritionals unit (which is mostly McNeil) fell 23% to $1.43 billion last year from $1.85 billion in 2010.

    That implies a drop of about another $400 million last year, though other factors besides the recalls are likely reflected in the decline. (Sales fell 37%, or by $1.04 billion, to $1.85 billion in 2010 — a larger amount than the $900 million the company attributed to the recalls.)

    CEO William Weldon told analysts today that the company is making progress on the quality-control and other fronts. “We have turned the corner on a particularly difficult period for our company,” he said. And by the end of this year, he expects McNeil to reintroduce most of the OTC brands that were affected by recalls and haven’t yet returned to store shelves.

    (Some products are already back: the company began shipping Tylenol Cold & Flu Severe caplets in September, while the first Tylenol kids’ products started returning to shelves in November 2010.)

    J&J also said it was making progress addressing the requirements of an FDA consent decree it signed last March covering a now-closed plant in Fort Washington, Penn. as well as two other plants that are still open. The Fort Washington plant is expected to reopen next year.

    Remediating the problems with the McNeil business will cost money; J&J said it sees slightly higher costs associated with those fixes this year compared to 2011.

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11. U.S. takes over three Tylenol plants

    Mar 10, 2011 | CNN Money

    By Parija Kavilanz

    The government is taking over three Tylenol plants following a blizzard of drug recalls and a Food and Drug Administration criminal investigation into safety issues at the factories.

    The FDA and the Justice Department on Thursday took action against McNeil PPC and two of its executives -- its vice president of quality and its vice president of operations for over-the-counter products -- for failing to comply with federally-mandated manufacturing practice.197898EmailPrint

    McNeil, a division of Johnson & Johnson (JNJ, Fortune 500), said it had agreed to put its plants -- one in Las Piedras, Puerto Rico, one in Fort Washington, Pa. and one in Lancaster, Pa., under FDA supervision.

    The agreement, known as a "consent decree," is subject to approval by a federal judge in Pennsylvania.

    The decree requires McNeil to adhere to a strict timetable to bring those facilities into compliance.

    McNeil also must retain an independent expert to inspect the three plants to determine whether the violations have been corrected, and to ensure that adequate manufacturing processes are in place. After expert certification, the FDA will determine if the facilities are in compliance.

    "This is a strong, but necessary, step to ensure that the products manufactured by this company meet federal standards for quality, safety and purity," said Deborah Autor, director of the Office of Compliance with the FDA.

    If McNeil and the executives violate the decree, the FDA may order McNeil to cease manufacturing, recall products and take other corrective action, including levying fines of $15,000 for each day and an additional $15,000 for each violation of the law.

    The fines can total up to $10 million annually.

    "We are a company that strives to do the right thing, and we succeed far more often than not. When we don't succeed, it's painful," Johnson & Johnson CEO William Weldon, wrote in a statement Thursday which was posted on the company's blog.

    "By moving to resolve the FDA's concerns about McNeil Consumer Healthcare US manufacturing facilities, we are able to look to the future and focus on what is most important to us: serving the millions of people around the world who rely on our products every day to meet their health care needs," he said.

    While a consent decree isn't an unprecedented step, that action is also not taken frequently, said Douglas Stearn, assistant director with FDA's Office of Compliance.

    "It is a significant step," he said.

    Stearn said the agency informed McNeil Thursday that it would proceed with a civil lawsuit against the company, citing its Tylenol and other drug recalls for violations of the Federal Food, Drug and Cosmetic Act.

    However, McNeil agreed to terms of a consent decree, which effectively warded off the FDA's lawsuit.

    McNeil's plants in Puerto Rico and Lancaster will continue to operate, McNeil spokeswoman Bonnie Jacobs said. But "there is the potential for some impact [in production] initially as we implement the additional steps."

    Stearn said McNeil can continue to manufacture and ship drugs from the Las Piedras and Lancaster plants, but not from the Fort Washington facility.

    The agreement also requires McNeil to destroy all drugs under its control that have been recalled from the three facilities since December 2009.

    Stearn declined to comment on the Justice Department's ongoing criminal investigation into McNeil's recall activities.

    McNeil also operates a facility in Guelph, Canada, Stearn said that plant was not affected by the agreement.

    McNeil's drugmaking plants have come under intense scrutiny over the past year after successive recalls in 2010 of over-the-counter pain and cold medicines such as Tylenol, Benadryl and Motrin produced at those facilities.

    The company shut its Fort Washington plant following a scathing FDA inspection report of the factory last May that cited 20 manufacturing violations.

    That facility makes all of McNeil pediatric over-the-counter Tylenol, Benadryl and Motrin medicines. The other two facilities make adult medicines, including Tylenol.

    In July 2010, McNeil submitted its plan to the FDA outlining steps toimprove quality at its facilities.

    David Rosen, a former FDA official, called Thursday's developments "very serious" for McNeil and its parent Johnson & Johnson.

    "If McNeil violates the agreement, regulators can shut down all the production at the plants," said Rosen.

    Consent decrees are also very expensive for companies, he said. "McNeil will have to pay for the outside expert and the new inspections. And there's millions of dollars in lost sales from drug products that can't be marketed." 

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12. Maker of children's drugs accused of hiding Motrin recall from public

    May 28, 2010 | The Washington Post

    By Lyndsey Layton

    The company at the center of a massive recall of children's Tylenol and other popular over-the-counter products tried to perform a "phantom recall" of defective Motrin by sending contractors around the country to buy up the medicine from stores without alerting regulators or the public, according to the chairman of a Congressional committee investigating the company.

    When faced last year with Motrin IB caplets that were not dissolving properly, McNeil Consumer Healthcare, a division of Johnson and Johnson, hired contractors to buy the products under orders not to mention the term "recall," according to documents released by the House Committee on Oversight and Government Reform.

    After the Food and Drug Administration discovered the effort -- because one of the contractors accidentally dropped an instruction sheet on the floor of a store -- McNeil announced a recall of roughly 88,000 packages of the product.

    It became the first of four recalls of McNeil products in the past year, including the April 30 recall of 136 million bottles of infant and children's Tylenol, Motrin, Benadryl and Zyrtec, which have shaken consumers' confidence and threaten to stain Johnson and Johnson's brand name.

    "It is a moral outrage for a company specifically marketing its products for children to allow a culture of neglect and irresponsibility to taint the medicines that parents and physicians trust to help children get well," saidRep. Darrell Issa (Calif.), the committee's ranking Republican, who displayed a bottle of Children's Tylenol at his seat.

    The FDA, which is investigating McNeil's three production facilities in the United States and is considering criminal prosecutions, found multiple violations of good manufacturing practices at McNeil's largest facility in Fort Washington, Pa., according to FDA officials. The company stopped production at that facility in April just days before FDA officials conducted a two-week inspection that resulted in the recall of more than 40 varieties of the medicines for infants and children. It remains closed.

    The recalled medicine may contain extra dosages of active ingredients and tiny particles that the FDA has identified as including nickel, chromium and cellulose. Some of the medicines also contained an ingredient that came from a master lot that was contaminated with a bacterium known as B. cepacia, according to the FDA.

    The FDA has collected 775 reports of children and infants who experienced an adverse reaction after taking one of the recalled medicines, including 37 deaths.

    But Joshua M. Sharfstein, a pediatrician and deputy FDA commissioner, said the illnesses and deaths appear to be side effects of the medicine and not related to its quality.

    "Our experts believe the risk for any child in the U.S. was remote," said Sharfstein, a father of young children who said he had several of the affected medicines at home. "From what we know, we don't have evidence of children who had serious problems because of quality problems."

    Colleen Goggins, a senior executive at Johnson and Johnson, told the committee that as a result of the problems, six senior executives were removed from their jobs, a consultant is helping redesign McNeil's manufacturing processes, and production at the Fort Washington plant will not restart until the company and the FDA are certain that improvements have been made.

    "I apologize to mothers, fathers and caregivers for the concern and inconvenience caused by the recall," Goggins said. "We will work hard to earn back your confidence."

    Sharfstein described how regulators grew increasingly concerned over the past year about McNeil's multiple recalls, its failure to adhere to its own quality standards, and its tardiness in fixing problems, responding to complaints and notifying federal regulators as required. "As manufacturing problems go, there were serious problems," he said.

    It came to a head in February at an "extraordinary" meeting between FDA officials and senior executives at Johnson and Johnson, Sharfstein said. "We went over the heads at McNeil to talk to the corporate parent," he said.

    Rep. Edolphus Towns (D-N.Y.), chairman of the committee, focused on what he called the "phantom recall" in which McNeil's contractors tried to quietly remove defective Motrin from stores in 2009. "I find this very disturbing," he said.

    Goggins said the company had no intention of hiding a defective product. She said it hired a contractor to take a statistical sample of the amount of the affected Motrin IB in stores, so the company could decide whether to conduct a recall. But she could not answer further questions. "I can't tell you right now what they were instructed to do or not, sir," Goggins said.

    Allan Coukell, a pharmacist and director of the Pew Prescription Project, which is aimed at improving drug safety, said after the hearing that he'd never heard of a "phantom recall."

    "It's fairly shocking -- the idea that if there was a quality problem, they'd try to bring the product back instead of being transparent," he said.

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