Johnson & Johnson Makes Management Changes

First appeared in Bloomberg

Johnson & Johnson, the world’s second biggest health-care company, announced its second round of leadership changes in less than a year in a unit that’s recalled dozens of brands of consumer medicines. Indianapolis Defective Drug Lawyer professionals are interested in these changes.

Patrick Mutchler, named in April as company group chairman for over-the-counter products, will retire, to be replaced by Roberto Marques, the New Brunswick, New Jersey-based drugmaker said in an e-mail today. Pericles Stamatiades, chief strategist for the consumer business, is also leaving after 28 years at J&J, and his duties will be reassigned, the company said. A Charleston Defective Drug Lawyer has been watching the changes.

The Mutchler and Stamatiades appointments followed two years in which J&J recalled hundreds of millions of packets of Tylenol, Motrin, Benadryl and other products due to foul odors, adulterated ingredients and bad labeling. While the company resumed some sales last year, a shuttered plant in Pennsylvania isn’t expected to reopen until next year, Chief Executive Officer William C. Weldon said on a Jan. 24 call. A Salt Lake City Defective Drug Lawyer had calls about the cases.

The over-the-counter business “will continue to be operated as a separate, integrated business in order to maintain its focus on quality and compliance, and on the successful reintroduction of OTC medicines in the U.S. market,” Bonnie Jacobs, a spokeswoman for J&J’s McNeil consumer unit, said in an e-mail. Denice Torres will continue to run day-to-day operations for the U.S. business, she said.

Consumer Dismissals

J&J’s consumer division, which includes McNeil, is dismissing an unspecified number of workers, the company said in a separate e-mailed statement. “These changes will help us better serve consumers’ needs and remain competitive in the face of ongoing global economic challenges,” J&J said.

Jacobs declined to say how many positions were cut. The Wall Street Journal, which first reported the management changes yesterday, said about 100 employees were dismissed. A Minneapolis Defective Drug Lawyer is interested.

J&J rose less than one percent to $65.91 at 4:04 p.m. in New York trading. The shares have gained 10.3 percent in the past 12 months. Pfizer Inc., based in New York, is the biggest seller of medical products.

Johnson & Johnson (JNJ) had $4.4 billion in over-the-counter sales last year, a drop of more than 25 percent since 2008, the year before the bulk of the recalls began. Jacobs declined to say why the leadership changes were being made now. Mutchler is leaving after 35 years at J&J, the company said. A Savannah Defective Drug Lawyer will continue to watch the cases.

“After a career of building successful businesses, it was Pat we turned to when we needed an experienced hand to strengthen McNeil, and again he has delivered,” said Jesse Wu, the company’s worldwide consumer group chairman, in a statement. Stamatiades is “a visionary whose legacy will continue to deliver growth to our business for years to come,” he said.

Johnson & Johnson, FDA take Heat over 'Phantom Recall'

Associated Press

 

Johnson & Johnson executives and the Food and Drug Administration both shouldered the blame Thursday for a secret recall in which hired contractors quietly bought up defective painkillers to clear them from store shelves.

J&J Chief Executive William Weldon told House lawmakers the company "made a mistake" in conducting the so-called "phantom recall," which is one of a string of problems that have drawn congressional scrutiny

In the same committee hearing, the FDA's deputy commissioner, Dr. Joshua Sharfstein, said his agency should have acted sooner to halt J&J's plan. At the same time, though, he stressed that regulators were not aware of the deceptive nature of the recall.

Sharfstein and Weldon testified before the House Committee on Oversight and Government Reform, which held its second hearing on J&J's unprecedented spate of recalls. The largest, involving more than 135 million bottles of infants' and children's Tylenol and other medicines, triggered the committee's investigation.

"We recognize that we need to do better, and we will work hard to restore the public's trust and faith in Johnson & Johnson," Weldon told lawmakers.

Democrats and Republicans pressed Weldon on its "phantom" recall involving 88,000 packets of Motrin, which Weldon acknowledged as "not one of our finer moments."

But lawmakers also pressed the FDA on when and what it knew about the activity. New Brunswick, N.J.-based J&J has repeatedly claimed it alerted the agency's officials in Puerto Rico, where the defective Motrin was originally manufactured.

Sharfstein said J&J informed the FDA of its plan to repurchase the pills - which did not dissolve correctly - in April 2009.

"From this point, it took until July for the FDA to tell the company that a recall should be conducted," Sharfstein said in his testimony. "In my opinion that message should have been given sooner."

But Sharfstein stressed that the FDA did not know J&J had instructed contractors to pose as regular customers while buying the product and to not alert store employees to their activity.

"Based on the documents I reviewed, I don't see any indication that the FDA was aware of the surreptitious, lying nature of the recall," he said.

Republican lawmakers criticized a "too cozy" relationship between FDA and J&J employees, citing months-long e-mail exchanges between the two before regulators took action. But Sharfstein said ultimate blame lies with J&J, pointing out that the FDA does not have the authority to order when and how companies conduct recalls.

"I think fundamentally the responsibility is with the company to handle their quality problems in a much different way," Sharfstein said.

Companies are advised to work with the FDA on recalls, although that isn't a legal requirement.

Committee Chairman Edolphus Towns, D-N.Y., has introduced a bill that would give the agency the power to order recalls.

The maker of trusted brands like Tylenol and Benadryl, J&J has announced nine recalls of drugs for children and adults since last September with problems ranging from too much active ingredient to tiny shards of metal.

In May, J&J closed its Fort Washington, Pa., facility, the largest manufacturing site for children's medications. J&J announced Thursday it would begin shipping its grape-flavored Children's Tylenol next week, the first of its children's formulas to return to the market.

Weldon said the company plans to invest $100 million across the company to improve facilities, equipment and operations around the world.

Weldon, who has been CEO since 2002, missed the committee's last hearing because of back surgery.

Testifying beside him Thursday was J&J executive Colleen Goggins, who oversaw the consumer division of the company's McNeil Healthcare unit during the recalls.

At the May hearing, Goggins told lawmakers she had no knowledge of instructions to contractors involved in the phantom recall to not tell store employees what they were doing. In her testimony Thursday, Goggins acknowledged that the company wrote those instructions.

"Based on what I have learned since May, I believe that McNeil should have handled things differently," Goggins said.

Goggins will retire in March, Johnson & Johnson announced this month.

 

FDA Ties Tylenol Recall to Contamination

The Wall Street Journal

Raw materials that were to be used to make several lots of the Tylenol products for children and infants that were recalled over the weekend were contaminated, the Food and Drug Administration said Tuesday.

Johnson & Johnson recalled about 1,500 lots of bottled products, including pediatric versions of Tylenol, Motrin, Zyrtec and Benadryl. The company's McNeil Consumer Healthcare unit said it was withdrawing the over-the-counter products, starting late Friday, because of manufacturing problems at its Fort Washington, Pa., plant.

The FDA inspected the manufacturing plant during a routine visit between April 19 and April 30.

Agency inspectors found that raw materials set aside for use to make several lots were contaminated with gram-negative bacteria, according to the inspection report. Such organisms are so named because they don't pick up the purplish dye used in the test to distinguish them from gram-positive bacteria. Both kinds of bacteria can cause infections.

FDA officials said the company may have used the contaminated inactive ingredients in manufacturing, but the company's testing of finished products didn't turn up contamination.

"The findings are serious, but we cannot say yet whether further action by the FDA is warranted," Deborah Autor, the FDA's director of compliance, said in a conference call with reporters.

Some of the liquid products may contain a higher concentration of their active ingredient than they should, while others may contain inappropriate levels of inactive ingredients or tiny metallic particles left as a residue from the manufacturing process, according to the company. The FDA report cited 46 consumer complaints regarding "foreign materials, black or dark specks" that were reported to the company between June 2009 and April 2010.

A spokeswoman for J&J's McNeil unit said the company has halted production at one plant. Other plants also make the medicines, and there are lots from those plants that weren't recalled and remain on store shelves. The spokeswoman declined to comment on the cost of the recall to the company or the source of the raw materials.

In a separate statement, she said that the J&J unit's own reviews had turned up some of the quality issues that the FDA observed and that McNeil won't restart operations at the Fort Washington plant until it fixes the problems and can be assured of product quality.

"We have no higher concern than providing parents with the highest quality products for their children," the company's statement said.

FDA Commissioner Margaret Hamburg said the potential for harm is remote. Still, she urged parents to avoid giving the medicines for precautionary reasons. "There are many alternative versions of these medicines available in generic form," she said.

To assist parents, the company has set up a hot line at 888-222-6036 and a website at www.mcneilproductrecall.com.

Johnson and Johnson Veteran to Lead Drug Unit

Johnson & Johnson named longtime company executive Sheri McCoy world-wide chairman of its pharmaceutical division, the largest but weakest-performing of J&J's three business segments.

Ms. McCoy, 49 years old, who currently heads the health-care conglomerate's surgical-care unit, will become one of the highest-ranking women in the drug industry. She will succeed Christine Poon, who has led the pharmaceutical division since 2000. Ms. Poon announced last month that she intended to retire in March.

Ms. McCoy will take her new post Jan. 1.

Like the rest of the pharmaceutical industry, J&J is facing increased generic competition while struggling to refill its pipeline of patented drugs. The pharmacy is working overtime to counter generics while Sales at J&J's medical-devices division grew 12% in the second quarter compared with a year ago, and its consumer-health sales rose 13%. Sales from its pharmaceutical segment rose just 3.1%. Excluding favorable currency-exchange rates, though, sales at the segment fell 1.3%.

A chemical engineer by training, Ms. McCoy was named in January to be chairman of the surgical group and to join the New Brunswick, N.J., company's executive committee. In 2005, she was appointed head of a J&J surgical subsidiary called Ethicon and head of the medical-devices division in Latin America.

Ms. McCoy's background doesn't specifically include pharmaceuticals, but J&J views breadth of business experience as an asset, according to J&J Chief Executive William Weldon. Ms. McCoy brings more research experience to the position than her predecessor, having started her career in 1982 as an associate scientist and serving in several senior research-and-development positions in J&J's personal-products division.

Factors that were considered in the decision include "track records of driving performance in different businesses, developing talent, and making decisions that reflect our company values," Mr. Weldon wrote in an email sent via a spokesman.

The company declined to make Ms. McCoy available for comment. Ms. McCoy wasn't named to the additional post of J&J vice chairman, a title Ms. Poon also holds.

Also Thursday, J&J said Alex Gorsky, 48, currently head of Ethicon, will succeed Ms. McCoy as chairman of J&J's surgical-care segment.