Canaccord Genuity Morning Coffee on Johnson & Johnson (JNJ): Big Legal Bills To Get Bigger
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Price: $145.74 +0.67%
Rating Summary:
16 Buy, 13 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
16 Buy, 13 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Canaccord Genuity Morning Coffee on Johnson & Johnson (NYSE: JNJ): Big legal bills to get bigger.
Last Friday, Johnson & Johnson announced that it set aside an extra $600 million to settle U.S. investigations and lawsuits into abusive marketing practices involving its Risperdal antipsychotic drug and other medications. But the legal bill seems to be growing as Bloomberg News reported that the settlement figure has risen to as much as $2.2 billion, citing two people familiar with the negotiations. If that figure holds, it would be the government’s second largest settlement with a pharmaceutical company, behind a $2.3-billion accord that Pfizer (NYSE: PFE) entered in 2009 to resolve U.S. investigations of improper marketing of its Bextra painkiller. The settlement, which could be announced this week, would include a criminal penalty of as much as $600 million, as well as a misdemeanor plea, according to Bloomberg. The deal would also resolve civil claims that J&J paid kickbacks to Omnicare (NYSE: OCR), a health care services company that dispenses drugs in nursing homes. In 2010, U.S. attorneys joined two whistle-blower law suits alleging J&J made improper payments to Omnicare to get the company to buy more of its schizophrenia drugs Risperdal and Invega and respiratory drug Natrecor, and Omnicare's pharmacists then recommended that doctors prescribe those drugs. J&J claims it gave standard discounts to Omnicare, and that those discounts were not illegal as long as they were properly disclosed. Separately, an experimental treatment for type 2 diabetes developed by J&J demonstrated greater reduction in blood sugar than Merck's (NYSE: MRK) Januvia and an older common treatment, glimepiride, according to data from a pair of late stage clinical trials.
Last Friday, Johnson & Johnson announced that it set aside an extra $600 million to settle U.S. investigations and lawsuits into abusive marketing practices involving its Risperdal antipsychotic drug and other medications. But the legal bill seems to be growing as Bloomberg News reported that the settlement figure has risen to as much as $2.2 billion, citing two people familiar with the negotiations. If that figure holds, it would be the government’s second largest settlement with a pharmaceutical company, behind a $2.3-billion accord that Pfizer (NYSE: PFE) entered in 2009 to resolve U.S. investigations of improper marketing of its Bextra painkiller. The settlement, which could be announced this week, would include a criminal penalty of as much as $600 million, as well as a misdemeanor plea, according to Bloomberg. The deal would also resolve civil claims that J&J paid kickbacks to Omnicare (NYSE: OCR), a health care services company that dispenses drugs in nursing homes. In 2010, U.S. attorneys joined two whistle-blower law suits alleging J&J made improper payments to Omnicare to get the company to buy more of its schizophrenia drugs Risperdal and Invega and respiratory drug Natrecor, and Omnicare's pharmacists then recommended that doctors prescribe those drugs. J&J claims it gave standard discounts to Omnicare, and that those discounts were not illegal as long as they were properly disclosed. Separately, an experimental treatment for type 2 diabetes developed by J&J demonstrated greater reduction in blood sugar than Merck's (NYSE: MRK) Januvia and an older common treatment, glimepiride, according to data from a pair of late stage clinical trials.
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