Oct 14, 2019

Johnson & Johnson's legal bills keep mounting

Illustration: Aïda Amer/Axios

Johnson & Johnson has spent $900 million on litigation in the first half of this year, and that tally is only going to swell.

The big picture: J&J is fighting thousands of legal battles over the safety of its prescription drugs and medical devices — chipping away at public trust in a health care company that has become a household name, and threatening to strip billions of dollars out of its coffers.

Where it stands: A jury recently said J&J had to pay $8 billion to a man who claimed he got enlarged breasts from taking the company's antipsychotic drug Risperdal.

  • An Oklahoma judge ruled J&J has to pay $572 million for its role in creating the opioid crisis. Billions more could be on the line for the company in the 2,000 other opioids cases.
  • J&J paid $1 billion earlier this year to settle cases tied to defective metal hip implants.
  • The company is appealing a $4.7 billion verdict tied to claims that its talc powder caused cancer in women.
  • A trial is underway in California over J&J's allegedly faulty pelvic mesh devices.
  • The Federal Trade Commission is investigating whether J&J's contracting practices for Remicade, a treatment for autoimmune and inflammatory diseases, violate federal antitrust laws.

What we're watching: We'll likely know more about J&J's litigation costs when the company reports its third-quarter earnings this week.

Yes, but: Investors have not fled J&J, because it is the most profitable health care company in the country, collecting almost $9.4 billion of profit in the first half of this year.

What they're saying: J&J submitted a statement that said its "reputation remains strong," and when it comes to its legal cases, "the facts in these cases are on our side."

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Major drug companies reach $260 million settlement in federal opioid trial

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Drug distributors McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceutical Industries, an Israeli-based manufacturer of generic drugs, reached a $260 million settlement on Monday to avoid the first federal opioid trial that was set to begin in Cleveland, the Wall Street Journal reports.

Why it matters: People familiar with the discussions told the New York Times that a broader settlement to resolve thousands of cases brought by local governments and states could be announced later in the day.

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Cardinal Health sets aside $5.6 billion for opioid lawsuits

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Why it matters: Cardinal is the first company to set aside billions of dollars in preparation for any national opioids settlement, even though a definitive settlement agreement has not been finalized.

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The ongoing opioid crisis cost $696 billion in 2018 and more than $2.5 trillion between 2015 and 2018, according to a new estimate by the White House Council of Economic Advisers.

Why it matters: Much of this cost is attributable to lives lost to opioids, but a good amount of it is borne by state and federal governments — and thus taxpayers. Meanwhile, opioid litigation settlement talks are homing in on payouts nowhere near this amount.

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