Last week Johnson & Johnson took a heavy beating in the court after jury ordered them to pay $8 billion for wrongly pursuing doctors to prescribe their drugs. While J&J may not have to pay this much for the verdict, it’ll still be in billions due to settlement and court losses over damage claims from artificial hips, baby powder, and opioid painkillers.
J&J still have to face in excess of 100,000 lawsuits over injuries inflected from their products including Invokana, and their vaginal-mesh devices. Market analysts anticipates that J&J will incur close to $20 billion just to resolve these cases.
J&J has already seen a decline of 12% in their share price from their peak owing to this never-ending lawsuits. According to Chris Schott, analyst at J P Morgan Chase & Co, main concern over the trails will be ‘an overhang on the shares for the foreseeable future’ as the company has already weakened in value because of $20 billion settlements.
University of Richmond’s law professor Carl Tobias, who teaches product liability said ‘J&J has been riding the litigation bronco over the past couple of years, and the ride is far from over, I’m sure investors are tired of it’. Many are criticising the company, saying, J&J values profits over ethics.
Michael Santoro, Professor of Business Ethics at Santa Clara University said, ‘J&J used to be the gold standard of ethical behaviour in the pharmaceutical industry, they just seem incapable of properly managing their ethical behaviour at this point. They’ve lost their way’.
Alex Gorsky J&J’s CEO and Chairman wrote on the company’s website that the code of business requires paramount standards of behaviour to maintain its customers’ trusts on the products. Drug manufacturers being dragged into the court is nothing new, J&J recently said they have an expansive legal strategy through which they evaluate the claims made against them and determine which ones to fight and which ones to settle.
J&J’s spokesperson made a statement, ‘We’re operating within a very litigious environment, and we must at times be willing to go to trial when the science, facts and law are on our side, we also have to remain open to resolving cases through settlement when and where that’s appropriate to do. We have a proven track record of being able to successfully and appropriately manage this balance’.