The drugmaker Johnson and Johnson has been ordered to pay a whopping $572 million fine. This results from the case filed by the state in the opioid crisis in Oklahoma. This is a landmark ruling not just in Oklahoma but for the entire nation. The ruling is likely to see many other pharmaceutical companies, retailers, and distributors in court. The lawsuit has opened the Pandora’s box, not just in Oklahoma, but in many other states. Here are the things you need to know about Johnson and Johnson Lawsuits.
1. The company was found guilty of deception
The judge found the company guilty of deception. It is alleged that the company marketed its products as non-addictive. This is not true and was intended to deceive the public. The company had ignored the repeated warnings from the FDA and had continued to market its products as non-addictive. Even though the ruling was not as bad as it could be, the fine of $572 million was ordered. While this is not much compared to the $15 billion that the prosecutors were asking for, it is a hefty sum of money. The fine is even lower than what investors feared it could be. In 2018, Johnson and Johnson’s revenue was about $81 billion. Its net income was about $15 billion.
2. The importance of the case
Johnson & Johnson’s case is important in the drug-making industry for several reasons. First, it holds drugmakers responsible for the role that they have played in the opioid crisis. It reinforces the fact that the Oklahoma courts consider the opioids crisis to be a serious matter. Teva Pharmaceuticals and Purdue pharma were fined $85 million and $270 million respectively. The two pharmaceutical companies denied any involvement in the crisis but the court thought otherwise. The Johnson and Johnson lawsuit is thus important in the opioid crisis and will form an important precedent in future litigation.
4. Opioid based lawsuits will be around for sometime
Johnson and Johnson’s case is just the start of opioid lawsuits. Already, there are over 2,000 pending cases in the U.S. Also, many other states that have sued Johnson. So, if it loses the case, it may need to find a way of settling the matter with other states. What’s more, is that appealing the Oklahoma case is likely to take some time before the verdict is reached. It means that the lawsuits may drag in courts for a longer time.
5. The lawsuit may not affect the company’s stock
Johnson and Johnson has been around for over 130 years. It is so far the world’s largest healthcare company. It involves itself in a variety of activities. It manufactures and sells medical equipment, consumer products and distributes pharmaceuticals. Thus, investors interested in stocks that pay healthy dividends should consider JNJ. Note that the company’s stock price has not changed much for the past year despite the challenges.
In a nutshell, the lawsuit implies that JNJ is guilty of misleading the public. It was accused of overstating the benefits of drugs through its marketing strategies. Besides, the company supplies opiate ingredients to drug manufacturers. Thus, from the court’s ruling, JNJ is guilty and is believed to play a role in the opioid crisis.