87. The Label (Johnson & Johnson)

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This episode of Swindled may contain graphic descriptions or audio recordings of disturbing events which may not be suitable for all audiences.

Listener discretion is advised.

We're here to help patients and that's our number one concern.

We want to improve their lives.

We want to get them up and moving again.

So we are working on new products all the time, working on making sure they're thoroughly tested and designed in the best way possible.

2005 was an exciting year for Depew Orthopedics.

The company was finally allowed to sell its new hip implant in the United States.

The Articular Surface Replacement, or the ASR, was held as a breakthrough in medical innovation.

The implants metal on metal cup and thigh components were supposed to last longer and feel more natural than its antiquated plastic counterparts.

The procedure also required less of a patient's thigh bone to be removed during surgery, and that's widely accepted as a good thing.

The ASR hip implant had been in use in Europe since 2003 with great success, according to DePue.

However, the version of the ASR being marketed in the US would be a little different.

The Food and Drug Administration would require a clinical trial of the new metal-on-metal implant, which could take years.

But, luckily for DePue, there's a nice big loophole called the 510K process, which allows manufacturers of medical devices to have their products pre-approved by the FDA if it can demonstrate that they are substantially similar to a product that has already been approved through the longer standard process.

The intended purpose is to give manufacturers the ability to make quick continual improvements to existing devices, which makes sense.

But, in some cases, the 510K process has been abused.

In this case, DePew combined the metal thigh component of an older product with the new metal cuff from the European ASR, essentially replacing the plastic.

And there you have it: a metal-on-metal hip replacement that's similar enough to an existing product on the market that it would not require clinical testing.

DePew's ASR hip replacement was officially for sale in the United States.

Over the next few years, doctors implanted tens of thousands of those things.

By 2008, DePue had sold more than a billion dollars worth of ASRs.

The excitement was palpable at Depew's Mardi Gras-themed sales conference that year.

A parade through the meeting hall featured costumed alligators, a giant metal hip implant, and a man in a lab coat covered in blood, carrying an axe.

All this while, DePue's head of marketing tried to sing along to a parody cover of Bachman-Turner Overdrive's Taking Care of Business.

The Pew's version was a tribute to the ASR's rapidly expanding market share called Taking Shares of Business.

Every day,

taking share of business every day.

Taking share of business.

But the party was short-lived.

Recipients of the ASR hip implant all over the world began complaining of excruciating pain within a few years of their surgeries.

Ann Morrison, a 50-year-old physical therapist from Delaware, told the New York Times that she requires a brace to walk and can no longer work after having both of her all-metal hip replacements replaced after experiencing constant discomfort and inflammation.

Marianne Dornbos, a 56-year-old former IBM employee in Illinois, told the Times that she couldn't stand up long enough to cook a meal after her ASR was implanted.

She eventually had it replaced, but the pain remained.

I have been told that I have to be prepared that it will be like this for the rest of my life, she said.

Angie Rodriguez in California had both hips replaced with the Metal on Metal Version 2.

But like so many others, Angie said it never felt right.

Before long, she told ABC7, it became evident that there was a problem.

On my right hip, I noticed a growth.

It was a half of a grapefruit size pillow of fluid, is what it turned out to be.

And they said that that was a pseudo-tumor, the pocket full of

fluid and metal debris, yeah.

A pocket full of fluid and metal debris caused by the metal ball grinding against the edge of the metal cup inside the artificial joint.

That metal debris was seeping into patient's surrounding tissue and destroying it beyond repair.

The only relief was getting a second painful and expensive hip replacement.

Sometimes it took a third and a fourth.

In the worst cases, the patient's muscles, nerves, and bones were so decimated by the metal debris that it was impossible to operate on them again.

The bone and soft soft tissues around the hips start to look like pieces of cheese, except pitch-black pieces of cheese.

That's how orthopedic surgeon Herbert Huddleston described what he had seen in patients with metal-on-metal hips to ABC-7.

Sometimes we get in there and it looks like it's filled with old oil that you've drained from your car, Huddleston said.

It's quite unbelievable in the bad cases.

Dr.

Anthony Nargol told the same station.

You go in there, you touch the muscle, and it just disintegrates.

It just like liquefies.

It's just destroyed in your hand.

Dr.

Nargol and a colleague had discovered the ASR's critical design flaw at their lab in the UK.

In February 2009, the surgeons met with the Pew officials who said they'd never heard of anything like that before.

The company expressed confidence in its well-selling device and turned the tables.

The Pew blamed any problems associated with the ASR implants on the doctor's improper surgical techniques.

The orthopedic surgeons in Australia must have been incompetent too.

Around the same time, the high rate of failure in the ASR hip implant was reflected in Australia's medical device registry.

There were numerous reports of metallic debris and dissolving muscle tissues.

Doctors were finding chromium and cobalt ions in patients' blood samples.

Not good.

But fortunately, there was no evidence of these side effects in the United States Medical Device Registry, but only because the U.S.

does not have a medical device registry.

In America, all safety alerts and recalls related to a medical device come from the for-profit manufacturer of that medical device.

Implementing a national registry for everyone's safety would be an expansion of government and a colossal waste of money, critics say.

as Medicare continues to spend hundreds of millions of taxpayer dollars every year to have faulty products removed or replaced.

Which is exactly what was happening with Depew's ASR hip replacements.

The number of affected patients was growing by the day, as were the number of lawsuits filed against Depew Orthopedics and its parent company, Johnson ⁇ Johnson, the family-friendly multinational corporation that seemingly owns everything.

But there was no panic inside the company's headquarters in New Brunswick, New Jersey.

Johnson ⁇ Johnson had weathered its fair share of controversies in its 125-year-old existence.

For For example, in the early 80s, seven people in the Chicago area died after ingesting cyanide-laced Tylenol they had purchased off store shelves.

The case remains unsolved, but J ⁇ J came out of it looking better than ever.

The company was widely commended for its quick response in recalling all Tylenol products and for its honesty in its communications with the public.

A textbook example of successful crisis management.

But those decisions were easy in comparison.

McNeil, the JJ subsidiary that manufactures Tylenol, Motrin, and other consumer health products, accounts for only 1% of Johnson Johnson's total sales.

Removing McNeil's products from the market temporarily would cause only minimal damage to the company's bottom line.

Pharmaceutical drugs and medical devices are where Johnson Johnson's bread is really buttered.

Admitting that there was a problem with their shiny new all-metal hip implant could have drastic financial consequences.

Behind closed doors, DePue decided to quietly phase out the ASR hip replacement because of, quote, declining sales.

Even though the truth was that the FDA had recently denied its application to sell the European version in the States, the device had no future.

DePue did not immediately communicate its plans to medical professionals or the public because there was still plenty of inventory to move.

But it did finally issue a safety alert for the ASR in March 2010, almost two years and tens of thousands of patients after DePue first learned of its critical design flaw.

A month later, in April 2010, Johnson and Johnson did issue a recall, but not for the ASR.

J ⁇ J recalled more than 135 million units of children's Tylenol, Benadryl, and Motrin medicines for possible bacterial contamination and the presence of small metal parts.

Unlike the Tylenol murders of the 80s, this recall was a public relations disaster for the company.

It was revealed that Johnson Johnson hired a third-party consultant to secretly buy up all the defective medicines from store shelves to avoid informing regulators and staging a full-blown recall, but the plan backfired tremendously.

Had Johnson Johnson lost its way, Wall Street wondered.

The corporation has always been so proud of its organizational credo, which, quote, challenges us to put the needs and well-being of the people we serve first.

If those principles still hold true, Johnson Johnson has a funny way of showing it.

In August 2010, after continually and consistently insisting that the device was safe, Johnson Johnson finally recalled both versions of the Depew ASR hip replacements, which had been implanted in 93,000 patients worldwide.

The recall followed a study by the British Orthopedic Association, which found that 50% of ASR implants would fail within six years.

In comparison, a traditional hip replacement typically lasts about 15 years.

Publicly, DePue disputed the results, but internally, the company had known the truth for years.

In 2007, DePue engineers tested the ASR's rate of wear, and the results were unacceptable.

We will ultimately need a cup redesign.

but the short-term action is manage perceptions, a Depew sales official told a colleague in a 2008 email.

That email was found by the plaintiff's lawyers and one of the first of over 10,000 ASR-related lawsuits that had been filed.

Lawyers had also discovered how Depew was able to capture enough market share to make everybody sing and dance in their khakis.

The company was funneling money to orthopedic surgeons through speaking fees and kickbacks.

In return, those orthopedic surgeons would implant the ASR into unsuspecting patients who simply trusted their doctor's suggestions.

But did you know

you can sell even more?

Did you know that the first billion is the hardest?

Billion here, billion there.

Pretty soon it adds up to some real money.

Anyone here want to go for two?

I'm going to say that again.

Does anyone here want to go for two?

That's what I'm talking about.

That's renowned orthopedic surgeon Dr.

Thomas Schmalz-Reed rallying the troops at that 2008 DePue sales conference to sell more ASR hip replacements.

Why?

Because as a member of DePue's surgeon design team, Dr.

Thomas Schmalz-Reed received a cut.

I don't use the term cut.

I'm sorry, a percentage of each ASR sold.

In total, DePue and Johnson Johnson had paid Dr.

Schmalz-Reed more than $20 million.

He was just one of many influential doctors on the payroll.

Okay.

Now, I'm just asking then, in terms of the things listed around your professional life, I don't see your position with DePue

on here,

is it?

I don't think I have a position with DePue.

I thought you even admitted you were on their surgeon design team,

weren't you?

I have been on the surgeon design team of products we've discussed today.

In fact, you've been paid over $20 million

by DePue

in

a period of, what, 15 years, right?

Something like that.

Is there any other job or any other thing on your CV where you've been paid by any source $20 million

or more?

I don't think so.

If that seems illegal, that's because it's supposed to be.

And DePue had already received a slap on the wrist for such actions as recently as 2007.

In 2007, without admitting to any wrongdoing, DePue paid $84 million to avoid criminal prosecution for allegedly conspiring to violate the federal anti-kickback statute by paying orthopedic surgeons through consulting agreements to use DePue products.

In 2011, Johnson Johnson paid $70 million to settle charges that some of its foreign subsidiaries bribed doctors in several European countries to use their products and paid kickbacks to the Iraqi regime of Saddam Hussein under an oil-for-food program rife with fraud.

Johnson Johnson lost the first ASR-related case that went to court in March 2013.

A Los Angeles jury awarded a Montana corrections officer more than $8.3 million for the pain and suffering caused by the artificial hip.

By the end of 2013, Johnson Johnson announced it would phase out all of its metal hip devices due to, once again, declining sales.

Yes, the company was still selling one version called the Pinnacle, which, surprise, had the same exact metal debris problem as the ASR.

As a result, thousands of lawsuits related to the Pinnacle hip replacement were stacking up in a separate pile.

So in November, JJ moved to settle all of of the ASR lawsuits at once.

$2.5 billion to an estimated 8,000 patients was the finalized total.

A third of the settlement, about $800 million, was set aside for the lawyers who negotiated the deal.

Later, additional payments were paid to patients who were not part of the class action.

Five Texas plaintiffs received about $150 million.

Six California plaintiffs received about $543 million.

And six plaintiffs from New York received about $247 million.

Johnson and Johnson and DePue appealed every single one.

Then, on May 7, 2019, Johnson and Johnson agreed to pay another billion dollar settlement to almost 6,000 plaintiffs who had their all-metal pinnacle hip implants removed.

I know it seems like a lot of money and a stiff punishment, but in the end, even after all the settlements, the corporation still came out ahead.

By itself, DePue Orthopedics earned $26 billion in revenue in 2019.

Johnson ⁇ Johnson, as a whole, collected more than $82 billion.

All things considered, not a bad year.

Oh, and the United States federal government never closed that 510K FDA loophole.

So, if it is financially beneficial to market and sell a defective product, What's to stop them from doing it again?

Well, luckily for us, Johnson ⁇ Johnson has that credo, remember?

We believe our first responsibility is to the patients, doctors, and nurses, to mothers and fathers, and all others who use our products and services.

In meeting their needs, everything we do must be of high quality.

If you say so.

In 2019, the same year Johnson ⁇ Johnson was settling billions of dollars in hip replacement lawsuits, It was settling another multi-billion dollar lawsuit involving its pharmaceutical subsidiary's new drug for people people with schizophrenia.

Keep that credo in mind while listening to this one.

A multinational corporation improperly markets an antipsychotic drug to children and the elderly and fails to warn doctors and patients about an irreversible side effect on this episode of Swindled.

They bribed government officials to hide accounting for clear violations of the pay state law earlier.

They have tens of

Dummied up its books and records and hide them.

Support for swindled comes from simply safe.

For the longest time, I thought home security meant an alarm going off after someone broke in.

But if the alarm is already blaring, it's too late.

The damage is done.

That's a reactive approach, and it leaves you with that awful feeling of violation, even if the intruder runs away.

That's why I switched to Simply Safe.

They've completely changed the game with Active Guard outdoor protection, designed to stop crime before it starts.

Their smart, AI-powered cameras don't just detect motion.

They can tell you when there's a person lurking on your property.

That instantly alerts SimplySafe's professional monitoring agents in real time.

And here's the game changer.

The agents can actually intervene while the intruder is still outside.

Talk to them through two-way audio, hit them with a loud siren and spotlight, and call 911 if needed.

It's proactive security, and that's real security.

I trust SimplySafe because there are no long-term contracts, no hidden fees, and a 60-day money-back guarantee.

They've been named best home security systems by U.S.

News and World Report for five years in a row, and I can see why.

Get 50% off your new SimplySafe system at simplysafe.com/slash swindled.

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A powerful medication called Risperidol has become a drug of choice for doctors treating patients with psychological problems.

Last year, it was prescribed more than six and a half million times and totaled more than one and a half billion dollars in sales.

But RISPRDAL can have troubling side effects, especially in children.

In 1994, Janssen Pharmaceuticals, the Belgian unit of Johnson ⁇ Johnson, announced some exciting news.

The Food and Drug Administration had approved its new drug RISPRDAL after clinical tests had shown that the medication significantly reduced symptoms of schizophrenia, like hearing voices, hallucinations, paranoia, and delusions of grandeur.

RISPRDAL also reduced the usual side effects caused by antipsychotic drugs, such as uncontrollable body shakes.

This announcement coincided with the plunging sales of Janssen's old antipsychotic medicine, which had reached the end of its patent life.

Generics had flooded the market.

Everything was cheaper.

Risperdahl was Johnson and Johnson's way to re-establish exclusivity over a proven winner.

Risperdahl worked.

But that's not to say that Risperdahl was better than existing medications.

In fact, in its approval, the FDA specifically forbade Janssen from making that claim in its marketing materials for the new drug.

RISPRDAL was simply a different type of medication, most effective in schizophrenic adults, according to the FDA.

Schizophrenic adults make up less than half a percent of the world population, as Jansen noted in its 1994 marketing plan.

Not exactly a booming market, quote.

The anticipated growth of the antipsychotic market does not create enough room for the Risperdahl sales forecast.

In other words, there's not enough schizophrenic people to sell Risperdahl to get our sales forecast hit.

However, Johnson Johnson and Janssen had more ambitious plans.

It started with the doctors.

Sure, Risperdahl's label might say that it is specifically meant to treat schizophrenia, but doctors can prescribe whatever they want to off-label.

Johnson and Johnson could convince medical professionals to prescribe Risperdahl to treat other ailments.

It's a mood stabilizer, after all.

It could help with most psychological disorders.

That's how the pitch would go.

In 1998, Johnson and Johnson formed a 136-person sales team for Risperdahl and named it Elder Care.

It was Elder Care's job to meet with doctors across the country.

specifically doctors at nursing homes to spread the gospel of Risperdahl, the drug that could help with everything, including dementia.

As an incentive, Johnson Johnson offered these doctors paid speaking fees based on the number of RISPRDAL prescriptions they wrote.

That approach seemed to work.

So did JJ's partnership with Omnicare, the Kentucky-based company that provided pharmacy management services to nursing homes all over the country.

Omnicare chooses which medications hundreds of thousands of patients receive every day.

According to the New York Times, Johnson Johnson's Janssen Pharmaceutical Division began paying Omnicare tens of millions of dollars in rebates and fees to prescribe Risperdahl for various conditions.

The returns for the company were tremendous.

Risperdahl was reclaiming Johnson ⁇ Johnson's long-lost market share, even though older, cheaper drugs were just as effective and available.

A surprising development, Johnson ⁇ Johnson's top-selling schizophrenia treatment may work no better than older pills sold for a fraction of the price.

This is according to a study this week in the New England Journal of Medicine.

In addition to doctors and pharmacies, Johnson ⁇ Johnson targeted governments.

The company successfully lobbied a dozen states like Texas and Pennsylvania to adopt RISPRDAL as its preferred first-line medication to treat schizophrenia and its state-sponsored mental health and Medicaid programs.

With its financial means, Johnson ⁇ Johnson was able to convince these states that the far more expensive new treatment was superior to generics.

Before the adoption of RISPRDAL, these states were paying $250 a year to treat an individual schizophrenic patient.

After RISPRDAL became the preferred choice, the cost per patient skyrocketed to $3,000 a year.

Taxpayer-funded corporate welfare.

Still, Johnson ⁇ Johnson and Janssen Pharmaceuticals wanted more.

In the late 90s, the company started pushing RISPRDAL, its medication approved only for schizophrenic adults, onto children.

by courting pediatricians and leaving RISPRDAL-branded Lego-style building blocks in their waiting rooms.

Sometimes they'd host an ice cream party at the doctor's office and tout the drug's efficacy between bites.

The new drug worked wonders on kids with autism, the sales team claimed.

Even ADHD, OCD, mood disorders, behavioral issues, you name it.

One dose of RISPRDAL and your child would be staring at birds for hours.

According to Stephen Brill at the Huffington Post, Janssen executives told its sales team that the company's highest priority was expanding the child and adolescent markets for Risperdahl.

One year, Janssen even had a back-to-school marketing campaign where a manager suggested they include lollipops and small toys and sample packs of the drug.

All of these tactics were effective.

By the end of 1999, almost 20% of Risperdahl's sales came from off-label prescriptions to children, some as young as four years old.

25% of sales belonged to the senior market.

That meant that almost half of Risperdahl's sales were to users for which the drug had not been approved.

Over the next five years, Johnson ⁇ Johnson's promotional efforts in those forbidden markets only increased, and it was paying off.

By 2004, Risperdahl was earning $3 billion a year for the company, with over 10 million prescriptions worldwide.

Also, by then, there was mounting evidence that Risperdahl had potentially serious side effects that Johnson ⁇ Johnson had failed to clarify.

At the same time, the company had advertised that its new medication was safer than similar drugs, which it had been expressly warned not to do.

In 2003, the FDA directed Janssen Pharmaceuticals to update the drug's label to warn about the increased risk of diabetes and strokes as a result of taking Risperdal.

Janssen complied and updated Risperdal's label, but continued to aggressively promote the drug in ways that minimized the risk of potential complications.

The FDA was not amused, so in July 2004, Janssen Pharmaceuticals sent out a two-page letter to doctors to elaborate on the drug side effects.

Less than a year later, the Food and Drug Administration announced that Risperdahl and similar antipsychotics were being linked to deaths in older patients with dementia.

The agency analyzed the results of 17 placebo-controlled trials involving the drugs and found that elderly patients with dementia who were given the pills were 1.6 to 1.7 times more likely to die than those given placebos.

RISPRDAL and other drugs like it would now be required to feature a black box warning, the FDA's most severe.

But that didn't stop the FDA from approving Risperdahl for other uses besides schizophrenia, which Johnson and Johnson had been pressuring the agency to do since day one.

On October 6, 2006, Risperdahl's label was changed again to include treatment for, quote, irritability associated with autistic disorder in children and adolescents.

As a result, Janssen could now legally market the product of patients who had already been taking it for years.

The side effects of the new label didn't change much.

Drowsiness, fatigue, increase in appetite, anxiety, nausea, dizziness, dry mouth, tremor, and rash.

However, there was one update that Jansen tried to sneak by.

Once taking Risperdol, John's mom says he became aggressive, sleepy, and developed bowel problems.

But the biggest shock came when he was 14 and started developing women's breasts.

These photos show John's out-of-control breast growth.

It turns out Risperdal can increase production of a hormone called prolactin, which stimulates breast growth.

It's called gynecomastia and it's irreversible.

Risperdal's new label warned of a 2.3% rate of gynecomastia.

The old label had simply listed the risk as rare.

which in FDA language means less than 0.1%.

However, according to an internal Johnson ⁇ Johnson study from 2000, the actual rate at which elevated levels of prolactin and Risperdol led to breast formation in young boys was as high as 5.5%.

Johnson ⁇ Johnson never divulged that number.

Not to the FDA, not to the doctors, not to the patients.

Instead, the company covered it up by combining multiple studies to water down the results.

The new numbers included patients who had only been taking Risperdol for short periods.

Johnson and Johnson knew that it took up to two months for the breast to start developing.

Johnson and Johnson did not care.

They marketed and sold Risperdoll to children anyway, fully aware of what could happen.

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Thousands of people, including young children, have been hurt by Risperdol and other antipsychotic drugs.

If your child or someone you know has taken Risperdol, there may be serious risks.

Protect your health.

Know your rights.

Contact the Scheller attorneys today, protecting you from dangerous drugs.

One evening, in October 2011, Benita Pledger was sitting in her living room in Thorsby, Alabama, when a commercial on TV made her burst burst into tears.

It was for a personal injury law firm describing something called gynecomastia, female breast tissue growth in males, as a result of taking the medication Risperdahl.

Bonita Pledger's son, Austin, had been prescribed Risperdahl back in 2002 when he was eight years old.

Austin had been diagnosed with autism when he was five.

His frequent meltdowns, as Bonita described them, forced her to take Austin out of school.

Bonita Pledger was desperate to find relief for her son, and she readily admits that Risperdahl helped to stabilize his condition.

But it wasn't a cure-all by any means.

Austin would still throw things sometimes, sometimes he would hit himself, but the edges of his moods were a little less sharp, if that makes any sense.

Austin Pledger was given at least a quarter of a gram of Risperdahl twice a day for five years straight.

Bonita watched her son transform physically almost immediately.

The pediatrician had warned her that Risperdahl might elicit some weight gain, but Bonita thought the risk was worth it if it would improve Austin's overall quality of life.

Also, at the time, Bonita was confident she could maintain Austin's weight with a healthy diet and exercise, but it soon became apparent that nothing she could do would work.

Every time Austin saw a doctor, his dosage was increased, and every time his dosage was increased, he gained another 20 pounds.

But it didn't seem like normal weight.

It was unevenly distributed.

Austin was top-heavy now.

Bonita had noticed that he had, quote, started getting heavy around his nipples.

Around 2006, when Austin was about 13 years old, Benita Pledger switched doctors who soon prescribed a different medication.

The weight gain stopped, but the damage was irreversible.

By the time he was 17 years old, Austin Pledger had grown 46 double D breasts.

His self-confidence was shattered.

He felt so ashamed of his body.

Bonita Pledger never had an inkling that such a side effect was possible until she saw that commercial years later.

After all the doctor appointments and pharmacy visits, nobody had ever warned her about gynecomastia.

There was a warning on the label, but back when Austin first started taking Whisperdahl, it listed the chances of gynecomastia as rare.

That warning was begging to be ignored by doctors and patients alike.

And now, the only solution Benita had learned was a double mastectomy.

That's not something she could ever envision putting Austin through.

He couldn't possibly understand.

Bonita Pledger collected herself and picked up the phone.

The law firm on the other end asked for a photograph of a shirtless Austin.

Yes, you definitely have a case, Benita was informed.

The Pledgers weren't the only ones.

Thousands of other patients and parents had already lined up to sue.

Attorney Stephen Scheller is suing Jansen, which makes Risperdal.

He claims Jansen marketed Risperdal for unapproved uses in children, downplayed serious risks like diabetes and seizures, and breast growth wasn't even mentioned under warnings, but was buried under precautions in obscure terms.

Sheller represents John and nine other boys, including this one who was only four when he developed a breast on one side and began producing milk.

Johnson and Johnson was also facing claims from former Janssen employees turned whistleblowers like Victoria Starr, a former sales representative.

She sued the company in April 2004, alleging that Johnson ⁇ Johnson had illegally promoted RISPRDAL to children.

She also revealed that sales of that specific medication accounted for 70% of employee bonuses.

Judy Doderill and Camille McGowan, also former sales representatives at Janssen, decided to blow the whistle after being stonewalled by upper management about their similar concerns about marketing the children.

All of the whistleblowers, five in total, collected and delivered thousands of documents to federal investigators before quitting their jobs.

Judy Doderill even wore a wire to a Jansen sales conference.

It felt good doing the right thing for once.

All of them were disgusted with the company they used to work for.

The amount of evidence was overwhelming, so in addition to the whistleblower lawsuits, the federal government also launched a criminal investigation into Johnson and Johnson.

It was a lot to untangle, but investigators caught a break in January 2010 when Curtis J.

Berry, Jansen's former Risperdahl product director, came forward to tell all and make sense of it.

Still, the investigation would take years to complete.

Meanwhile, attorneys general in almost every state in the Union were preparing lawsuits against Johnson and Johnson for promoting Risperdahl for uses it did not have approval for and for minimizing or concealing the risk associated with the drug.

Some states were looking to recoup what they had been duped into paying for the name brand medicine when they could have purchased the cheaper and just as effective generic versions instead.

There had also been a growing chorus of complaints about antipsychotics being over-prescribed in children.

According to the New York Times, prescription rates for drugs like Risperdol had increased more than five-fold for children over a 15-year span.

A congressional investigation back in November 2008 had revealed that Johnson and Johnson funded a research center at Massachusetts General Hospital in Boston.

There was evidence that Dr.

Joseph Biederman, a world-renowned child psychiatrist and prominent advocate of using antipsychotic medicines to treat bipolar disorder in young children, had urged the company along.

According to internal Johnson and Johnson emails, Dr.

Biederman had approached the company multiple times to propose the creation of a research center that would, quote, generate and disseminate data supporting the use of Respiridone in children and adolescents.

Biederman promised the company that the goal of the center would be to, quote, move forward the commercial goals of J ⁇ J.

Respiridone is the generic name for Risperdahl.

Johnson and Johnson liked the idea.

Not only did they fully fund the Johnson and Johnson Center for Pediatric Psychopathology Research at Massachusetts General Hospital, but the company also prepared a draft summary of a study showcasing the benefits of Respiridone treatment in children for which Dr.

Biederman would take credit.

Johnson and Johnson just needed him to sign his name.

And he did.

And for all that hard work, Dr.

Joseph Biederman received at least $1.6 million in consulting fees from Johnson and Johnson.

Yet he only reported $200,000 of that income to Harvard University, where he worked.

In an emailed statement to the New York Times, Dr.

Biederman said, My interests are solely in the advancement of medical treatment through rigorous and objective study.

And he said he took conflict of interest policies, quote, very seriously.

Dr.

Biederman's influence and effort have unquestionably helped fuel the rapid rise in the use of antipsychotic medicines in children.

It was all part of the plan.

Johnson Johnson and Janssen Pharmaceuticals were able to squeeze billions of dollars out of Risperdahl before its patent expired.

Then the company reinvented the drug in an injectable form to squeeze out a little more.

Yet, despite the financial success, in addition to the emerging Risperdahl lawsuits, consumers and investors were losing confidence in the New Brunswick-based healthcare giant for a multitude of other reasons.

A pharmaceutical company accused of getting illegal kickbacks has to cough up millions of dollars.

Cincinnati-based Omnicare is accused of steering people on Medicaid to drugs made by a specific manufacturer and away from competing manufacturers.

In November 2009, Omnicare, the Cincinnati chain that managed the pharmacies at nursing homes, paid $98 million to settle accusations that it received kickbacks from Johnson ⁇ Johnson.

The following year, the Securities and Exchange Commission charged JJ with bribing foreign doctors to use their medical devices.

The company later avoided criminal charges by paying a $70 million fine.

Oh, and those medical devices Johnson Johnson was pushing so hard turned out to be defective.

There were massive potential liabilities on the horizon related to its metal-on-metal hip implant.

And there were rumors on Wall Street that more would follow because of the Johnson Johnson subsidiary-branded transvaginal mesh that was crippling women all over the world.

Not to mention the massive recall of children's medicines in 2010 that cost the company $600 million, for which now the company's shareholders were suing Johnson ⁇ Johnson to recover.

What's next?

Are you going to tell me there's asbestos in the baby powder?

This case is about holding the directors accountable for the damage their bad faith actions and inactions has caused the company and its shareholders, the shareholders noted in their lawsuit, and to ensure that the Johnson ⁇ Johnson ship is righted and that it conducts its business in a law-abiding manner in the future.

Plaintiffs in the upcoming Risperdahl lawsuits had a similar goal.

This case is not just about recovering money, it's about putting an end to this kind of misconduct by a drug company.

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The second one is really understanding the global impact of your decision.

When you're starting in one particular area and you have a rather local impact to today, where every decision you have can have an impact globally.

You know, from Mumbai to Minneapolis,

from Warsaw, you know, to Miami, and

always considering what that true global impact of a particular decision can be.

A man like Alex Gorski understands how a single decision can help make a global impact.

Mr.

Gorski was president of Janssen Pharmaceuticals while RISPRDAL was being marketed to children and seniors for a half a dozen years.

That's why lawyers for plaintiff Aaron Banks were eager to talk to him.

Aaron Banks was only nine years old in 2000, the year he was prescribed Risperdahl.

Banks claims the drugs caused him to develop female breasts.

He had painful surgery to remove them.

Due to that psychological trauma and physical torment, Aaron Banks, now 21 years old, was suing Johnson and Johnson in a Philadelphia court.

That trial, which began in September 2012, was the first Risperdahl personal injury case to go in front of a jury.

Johnson and Johnson settled quickly after the first day of testimony, none of which came from former Janssen president Alex Gorski.

Johnson and Johnson had argued that Mr.

Gorski was too far up the chain to have any knowledge of the events in question concerning Risperdahl.

There was no reason for him to take the stand, even though, during a deposition, Alex Gorski had admitted to signing the initial check for Dr.

Biedemann's Pediatric Research Center.

The plaintiff's lawyer also pointed out that Gorski had bragged about Risperdoff's sales numbers on his resume.

It kind of seemed like he knew what was going on.

Too bad.

It wasn't going to happen.

Johnson ⁇ Johnson offered Aaron Banks enough undisclosed amounts of money to walk away.

Clearly, the company was trying to avoid having Alex Gorski take the stand.

Presumably for two reasons.

A, he probably knew too much, and B, he had just recently been promoted the CEO of the entire corporation.

And by the time Alex Korski took over as the new chief executive of Johnson Johnson on April 26, 2012, the company had already settled several lawsuits with several states related to what seemingly appeared to be his Janssen handiwork.

In 2011, a South Carolina judge levied civil penalties of $327 million against Johnson Johnson for marketing Risperdahl for unapproved uses.

Johnson Johnson admitted no wrongdoing.

Before that, a jury in Louisiana ruled that the company owed the state $258 million for misleading doctors.

Johnson and Johnson admitted no wrongdoing.

On January 19, 2012, the company agreed to pay the state of Texas $158 million to settle a lawsuit for improperly influencing officials in a scheme to profit from the state's Medicaid program.

That case was brought along by a former investigator in the Pennsylvania Inspector General's office named Alan Jones.

He discovered suspicious payments for Johnson Johnson to Pennsylvania state officials.

When Jones reported those payments to his superiors, he was taken off the case and the evidence was buried.

Alan Jones's continued investigation uncovered a widespread practice that included many other states, including Texas, where Johnson Johnson was essentially purchasing influence to make drugs like Risperdahl the default brand.

Johnson Johnson admitted no wrongdoing.

In April 2012, the state of Arkansas fined the company $1.2 billion for nearly 240,000 violations of the state's Medicaid fraud law.

That verdict would later be overturned.

But at the time, it inspired Johnson ⁇ Johnson to combine and settle lawsuits from 36 other states, which it did in August 2012 for $181 million.

Even after all that, the litigation involving Risperdahl was just getting started.

Johnson ⁇ Johnson still face thousands of civil complaints from male patients with gynecomastia, as well as the big one, criminal and civil complaints from the federal government, related to the company's improper marketing and kickbacks.

The latter case was settled on November 4th, 2013.

We are here today to announce that Johnson Johnson and three of its subsidiaries have agreed to pay more than $2.2 billion to resolve criminal as well as civil claims that they marketed prescription drugs for uses that were never approved as safe and effective, and that they pay kickbacks to both physicians and pharmacies for prescribing and promoting these drugs.

Now, through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients, and private insurance industry.

They drove up costs for everyone in the healthcare system and negatively impacted the long-term solvency of essential health care programs like Medicare.

Now, the settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members members of our society, including young children, the elderly, and the disabled.

This announcement marks another step forward in our strategic, comprehensive, and effective approach to fraud prevention.

We can all be encouraged by

the actions that we have taken and by the results that we have obtained in recent years.

As part of the settlement, Johnson ⁇ Johnson was forced to admit that it had improperly promoted RISPRDAL to older adults for unapproved uses.

However, the company did not admit to any wrongdoing related to marketing the drug's use to children.

Nor did Johnson and Johnson acknowledge that it paid kickbacks to doctors and pharmacists to prescribe the medication.

Nor would any individual executives be charged with the crime.

That's how much innocence $2.2 billion can buy you.

And at the end of the day, it was a bargain.

Unfortunately, when you look at the scale of the fraud involved, a period stretching almost 10 years,

which was systematic, in many cases directed from management,

and then you look at the fine that was paid, $2.2 billion, that represents less than one half of what the company made on the drug in a single year.

And it represents probably one-tenth of what the company made on the drug over the course of the wrongdoing.

So it's hardly a deterrent to any future fraud.

According to the Huffington Post, Johnson ⁇ Johnson has never come forward with any information that any of its employees were disciplined or fired for illegally promoting Risperdahl.

Quite the opposite, in fact.

In 2014, merely months after settling with the federal government for $2.2 billion,

Johnson ⁇ Johnson CEO Alex Gorski was given a 48% pay raise.

His annual compensation was up to $25 million.

In January 2015, the first of 10,000 RISPRDAL personal injury lawsuits to go to trial belonged to Austin Pledger, the now 20-year-old with 46 double D breasts.

Bonita Pledger, his mother, and her legal team, sought to prove that Janssen, quote, had discovered a significant risk of gynecomastia among boys who ingested Risperdol for 8 through 12 weeks and had demonstrated elevated prolactin levels while taking the drug.

But according to the pledgers, despite Johnson and Johnson knowing that information, it did not communicate that risk to the FDA or doctors prescribing RISPRDAL.

A Philadelphia jury concluded that Austin Pledger had not been adequately warned about the antipsychotic side effects, and he was awarded $2.5 million in damages.

This is his mom, Benita Pledger, in an interview with the Huffington Post.

I was not angry with J and J.

I went into it very naively, knowing that the medicine caused the gynecomestio, but not quite grasping their knowledge, that was the part that upset me the most.

When it finally hit me,

Johnson and Johnson knew they knew what they were doing to my child.

They don't care about Austin Pledger.

That's ugly to say, but

it was just a game to them, it felt like.

A spokeswoman for Janssen said the company was, quote, disappointed and believed that Austin Pledger's verdict should be overturned.

The company claims that Risperdahl's side effects were clearly communicated Pledger, his family, and the prescribing doctor, and that when you really think about it, Boston Pledger's, quote, quality of life was significantly improved while he was taking Risperdahl.

In the second trial, which took place in March 2015, a jury found that Johnson and Johnson did negligently fail to adequately warn healthcare providers of the extent of the risk of gynecomastia stemming from the use of Risperdal.

but they did not find the company's negligence a substantial factor in bringing about the plaintiff's gynecomastia.

As a result, no damages were awarded.

It was a rare win for Johnson and Johnson.

Many chalk it up to an unsympathetic plaintiff, an autistic man who had been known to kill cats.

Several more Risperdahl cases were heard over the next few years.

The verdicts were unpredictable.

Some were dismissed, others were confidentially settled.

But most cases, Janssen and Johnson Johnson lost.

They were ordered to pay settlements ranging from half a million dollars to $8 $8 billion.

Well, Johnson Johnson, of course, is no stranger to the courtroom with investors bracing for headlines about his cases involving both talc powder and opioids.

But the news late yesterday was unexpected.

A Philadelphia jury said JJ must pay $8 billion in punitive damages in a case involving its antipsychotic drug, Whisperdahl.

That $8 billion verdict awarded to a 26-year-old Maryland man who grew breasts was later reduced to $6.8 million in January 2020.

Less than two years later, Johnson Johnson settled substantially all of the remaining personal injury lawsuits, roughly 9,000 of them, for a total of $800 million.

Again, if you do the math, for Johnson Johnson and Janssen Pharmaceuticals, it was worth it.

Today, Johnson Johnson is worth more than $400 billion.

Its CEO, Alex Gorski, has been honored with social responsibility awards.

He's been called a man of integrity.

And Janssen Pharmaceuticals, according to their leader, has been very busy.

Last week, I was privileged enough to witness some of the very first residents in our home state of New Jersey receiving doses of our vaccines just 13 months.

13 months after we started the development process.

And when one of the residents,

this senior apartment, was asked how she felt

after

she was given the shot, she looked at me and replied, safe.

I couldn't be more proud.

Whoops.

Looks like we're out of time.

So long, everybody.

Until next time, take care of each other and take care of yourself.

Swindled is written, researched, produced, and hosted by me, a concerned citizen, with original music by Trevor Howard, aka The Former, aka The Pinnacle.

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