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Johnson & Johnson has been subpoenaed by the U.S. Attorneys of Philadelphia, Boston and San Francisco regarding its sales and marketing of three prescription drugs: bestselling antipsychotic Risperdal, epilepsy and migraine drug Topamax, and heart failure medication Natrecor. The subpoenas are inquiring into J&J's corporate supervision of the three subsidiaries that produced the products: Janssen, Ortho-McNeil and Scios, respectively. Last month, the company informed the Department of Justice and the SEC that overseas subsidiaries were "believed to have made improper payments in connection with the sale of medical devices in two small-market countries," a disclosure that precipitated the departure of Michael Dormer, J&J's worldwide chairman of medical devices. J&J says it plans to cooperate fully with the investigations, and analysts do not believe they will cause a significant negative impact on the stock. Drug and device companies are increasingly finding themselves subject to investigation: J&J competitor Eli Lilly announced recently that it has been subpoenaed by 26 state attorneys general regarding Zyprexa, its bestselling antipsychotic drug.

Sources: Press Release, Wall Street Journal, Newsday, TheStreet.com
Commentary: Johnson & Johnson Discloses Serious Payment Breaches in Foreign UnitWhere's the Money Flowing in Healthcare Stocks?
Stocks/ETFs to watch: Johnson & Johnson (JNJ). Competitors: Merck & Inc. (MRK), Novartis AG (NVS), Eli Lilly & Co. (LLY). ETFs: iShares Dow Jones US Pharmaceuticals (IHE), DIAMONDS Trust, Series 1 (DIA), iShares S&P 500 Growth Index (IVW)

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Source: Johnson & Johnson Subpoenaed on Marketing of Three Drugs