Johnson & Johnson's Growth? Mainly in Recalls

Includes: JNJ, MRK
by: Pharmalot

No sooner did we finish writing about yet another Johnson & Johnson (NYSE:JNJ) recall, when a report comes in that - yes, it is true - still another product is being yanked. This time, the beleaguered health care giant is pulling 395 injectable devices that contain the Simponi rheumatoid arthritis medicine from the U.S. and Germany, due to a potential defect that could deliver an insufficient dose (look here for some info).

The problem, which began at a plant in Switzerland, was discovered during routine testing. A spokesman tells us most pens were quarantined, but some were shipped to distributors. In all, 165 pens are recalled in the U.S. and the rest in Germany. The European Medicines Agency, meanwhile, says some countries will not have supplies until May; production is expected to resume next week (see EMA statement). This was first reported by Dow Jones.

As noted previously, the number and magnitude of Johnson & Johnson recalls is breathtaking, raising serious questions about the the ability of the health care giant to exercise quality control over its extensive manufacturing arrangements, and whether it is time for shareholders to demand that CEO Bill Weldon himself undergo a recall (look here).

Simponi, by the way, is the follow up to the best-selling Remicade rheumatoid arthritis treatment, and Johnson & Johnson is fighting Merck (NYSE:MRK) for the rights to both meds. Here’s the background: Schering-Plough (SGP) had distribution rights to both drugs outside the U.S. But after Merck bought Schering-Plough, with which J&J had a co-marketing agreement, J&J claimed the takeover canceled their deal, citing a change-of-control provision. Merck argues its takeover was really a reverse merger and so J&J, which receives a portion of profits each year, filed for arbitration. A decision is expected… soon.

Disclosure: None

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Tagged: , Drug Manufacturers - Major
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