J&J, Shareholders Reach Tentative Deal in Lawsuit
Lawyers for Johnson & Johnson shareholders suing management for not fixing serious problems for years– from shoddy manufacturing to paying kickbacks to boost sales — have reached a tentative settlement with the health care giant.
The deal calls for big changes, including a new committee of independent board members to get reports about legal and quality problems directly from key executives so they can address them right away.
The plaintiffs, institutional and individual investors, claim Johnson & Johnson’s decentralized management gave top executives and board “plausible deniability” as problems worsened.
Those included kickbacks paid to doctors and pharmacists to boost product sales, marketing of drugs for unapproved uses and manufacturing deficiencies so severe they’ve led to dozens of product recalls, keeping some products off the market for a couple years.
(Copyright 2012 by The Associated Press. All Rights Reserved.)