In a bid to resolve a long-running and controversial saga, the Johnson & Johnson JNJ -0.62% unit that sells over-the-counter medicines has agreed to plead guilty to a misdemeanor and pay a criminal fine of $20 million for selling adulterated infant and children products. The McNeil subsidiary also agreed to forfeit $5 million, according to the U.S. Department of Justice.
The move comes six years after McNeil first received complaints about unusual particles in bottles of Infants’ Tylenol, but failed to conduct needed investigations to determine the cause or how to prevent a recurrence, according to the feds. There were, in fact, “numerous other instances” in which McNeil subsequently failed to initiate or complete a so-called corrective action plan (see the plea agreement and information sheet).
The problems prompted the FDA to conduct a series of inspections and McNeil began a string of embarrassing recalls of tens of millions of bottles of various products, including versions of Motrin made for infants and children. The events contributed to a sustained slowdown in sales for the McNeil unit, which had traditionally been a reliable source of revenue.
Thank You Mr Silverman.