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Johnson & Johnson is a Disgrace

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May 14, 2010 – Comments (5) | RELATED TICKERS: JNJ

Johnson & Johnson (JNJ) has been in the news quite a bit lately for its recall of children's drugs including Tylenol, Motrin and Benadryl for quality issues.  As someone with two small children who have had to consume these products from time to time I was somewhat disturbed by this news, not to mention the fact that I probably had to throw fifty to a hundred bucks worth of the stuff in the trash.

However, now that additional information on the problems with these products is coming to light, I am absolutely disgusted with JNJ.  If you have children, you definitely have to take a look at the following article that details the horrible conditions that existed at the company's plant, 'Shocking' conditions at Tylenol plant.

Here's some highlights:

"It's absolutely shocking," said David Lebo, a professor of pharmaceutical manufacturing at Temple University in Philadelphia, referring to the Food and Drug Administration's May 6 inspection report on the facility in Fort Washington, Penn., operated by Johnson & Johnson's McNeil division.

"This inspection report is pretty close to being the worst I've seen. It suggests that basically the FDA found an issue with almost every system at the plant,"  

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the plant "does not maintain adequate laboratory facilities for the testing and approval (or rejection) of components of drug products." 

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The report also said that McNeil failed to follow up on 46 consumer complaints received from June 2009 to April 2010 "regarding foreign materials, black or dark specks."  

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The FDA also said that lack of proper controls in the manufacturing process led to some batches of infant's Tylenol being "superpotent," or having too much of some ingredients. [so much for the recommended dosage that we all carefully measure out for our kids]

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The FDA inspectors further detailed dusty and filthy conditions at the plant, including "incubators with a large amount of visible gray and brown dust/debris, large hole in the ceiling and thick dust covering the grill inside a filtered cabinet." 

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In addition, the FDA said some drums used to transport raw materials to the Fort Washington facility were contaminated with a bacteria identified as B. cepacia. 

Johnson & Johnson is producing name-brand medication in the United States of America.  This isn't some third world country or a company that makes cheap products.  This sort of crap is either a result of terrible greed, ineptitude, or laziness or a combination there of on Johnson & Johnson's part.

I don't know what sort of impact, if any it will have on the company's stock. It probably won't hurt the behemoth much, heck it survived people putting cyanide in its main product years ago, but I am sickened enough by this situation to close my CAPS outperform call on the company in protest.

When one purchases more expensive "branded" medication, they spend more of their hard-earned money than they have to out of love for their children under the assumption that it is better for them.  It turns out that some of the "cheap" generic versions of these drugs are probably better quality than the expensive stuff.  It will be a cold day in he-two-sticks that I buy JNJ medication for my family again.  I'm going to try to avoid the company's other products as well.

I hope that the government throws the book at them, forces them to completely close this plant and pay a huge fine.  They've earned it.  

Shame on you Johnson & Johnson.

Deej 

5 Comments – Post Your Own

#1) On May 14, 2010 at 4:50 PM, davejh23 (< 20) wrote:

"The report also said that McNeil failed to follow up on 46 consumer complaints received from June 2009 to April 2010 "regarding foreign materials, black or dark specks." 

I'm not defending the company, as I also have small children that have used these products on multiple occasions (and I have product that should probably be thrown out)...however, these complaints regarding black specs are VERY common from parents that put the infant medication dispensers in their sick kid's mouth...the whole bottle becomes a petri dish.  They looks at the bottle the next day, notice the specks, and freak out that they gave that to their kids the day before, when in fact, it's their kid that gave the bottle that.  I used to work in a pharmacy and I've seen parents come in freaking out and threatening law suits, etc... 

Still, these other findings are disturbing...

 

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#2) On May 14, 2010 at 10:28 PM, devoish (98.57) wrote:

I hope that the government throws the book at them, forces them to completely close this plant and pay a huge fine.  They've earned it.

Is Government big enough?

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#3) On May 15, 2010 at 5:13 PM, amassafortune (29.46) wrote:

Yes, the government is big enough - to offer protection for a price. As unlikely as it seems, the trend may go back to the Harley Davidson governmental save under Reagan in 1983. The pro-Harley 10-bagger tariff increase soon converted to a 10-bagger HOG stock price increase. Large businesses got the message. Politicians learned, like Reagan, they could take actions against their core beliefs and positions, and spin negatives into positives. As for consumers, Japanese cycle innovation that produced over 100 new models before protection, trickled to only a handful of new models after the tariff increased.

As Daniel Klein points out in his policy analysis piece from 1984 "By any economic criterion, the new tariff is counterproductive, and the Reagan administration was fully aware of it. The decision is thus an interesting case study in the political economy of protectionism."

Tariffs, protectionism, customized one-company riders, campaign contributions, PACS, the revolving door from regulation to industry dream job, and similar tactics are as commonplace today as their ability to harm consumers. 

Laws, rule changes, and policy adaptations have outlawed most of the downside to cutting corners in quality and safety. It doesn't matter if a consumer is hurt by a financial, food, or medical product these days. The best one can hope for is sympathetic arbitration. 

So, J&J, Toyota, BP, GS, JPM, and most other newsmaking companies remain a buy. Expect higher sales, EPS, and dividends in the coming years, even as we start to double-dip. If you think any of the final backstop functions envisioned by our forefathers will make a difference, remember the nearly-silent words of Justice Alito - "Not true"

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#4) On May 15, 2010 at 6:39 PM, ralphmachio (24.75) wrote:

Just a peak at the scaffolding and cardboard behind the facade of an empire which is no longer solvent.

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#5) On May 16, 2010 at 1:31 AM, onpointadvisor (< 20) wrote:

http://www.otcproductnews.com/otc-product-news/fda-indictment-of-jj-product-quality-suggests-gross-cavalier-incompetance.html

http://www.otcproductnews.com/otc-product-news/jj-product-integrity-slammed-again.html

http://www.otcproductnews.com/otc-product-news/jjs-tylenol-pm-clinical-doomed-to-fail.html

http://www.otcproductnews.com/otc-product-news/tylenol-pm.html Report this comment

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