NEW BRUNSWICK, NJ–In the spring of 2009, "secret shoppers" across the United States were discreetly buying up thousands of bottles of Motrin from the shelves of retail stores.
New Brunswick's own Johnson & Johnson had, through a private contractor, given them instructions to buyback defective Motrin pills from 5,000 U.S. stores, but not reveal there was an effort to recall the pills.
Instead the shoppers were instructed to act like regular customers and not mention a product recall. It was one of several controversies to make its way into a comprehensive 15-part series on J&J published by Huffington Post Highline in September.
Now, more than six years after it happened, the so-called “phantom recall” has resurfaced in an appellate court ruling in a case brought by the State of Oregon.
The appeals court ruled on November 25 the trial judge was wrong to dismiss the case in 2012, according to a report by Law360.
“Oregon’s attorney general succeeded… in persuading [the] court to revive allegations that Johnson & Johnson broke the rules with an undisclosed ‘phantom recall,’" reads the report.
“The Oregon Court of Appeals agreed that a trial court erred by determining that Johnson & Johnson didn’t violate the state’s Unlawful Trade Practices Act by paying 'secret shoppers' to buy up the defective drugs rather than issue a public recall.”
Oregon sued J&J in 2011, becoming the first state to take legal action over the drug giant’s quiet recall of Motrin, which came after the company learned that more than one batch of the painkiller didn't dissolve properly.
The suit alleged that several J&J subsidiaries became aware of a defective batch of Motrin made in a Puerto Rican factory.
After discovering late in 2008 that pills made at its Puerto Rican factory didn’t dissolve properly, J&J hired a company to use undercover shoppers to survey the situation in April 2009, and then beginning in June 2009, to buy the bad Motrin from stores.
J&J did alert the U.S. Food and Drug Administration that it knew about a couple of bad batches, but said the defective “pills were only sold in eight-count vials, concealing their presence in 24-count bottles,” according to the suit.
By the end of September 2010, J&J was being investigated by the House Committee on Oversight and Government Reform regarding the Motrin recall.
The government was also reviewing J&J documents connected to other popular children’s medicines made by McNeil.
According to committee chairman Edolphus Towns, a Democrat from New York, J&J delayed and resisted dealing with the committee, and company documents indicated they chose not to alert the FDA about possible problems with the bad Motrin.
Was McNeil Consumer Healthcare division exercising basic safe-guards while manufacturing the over-the-counter products? Was the company’s action responsible and will it encourage other companies to withhold information that should be made public?
The FDA has a division that makes sure medications are safe. In 2009 it began inspecting McNeil factories and published a series of vivid reports outlining deficiencies in how the drug giant was making drugs like Tylenol, Visine, Rolaids, Benadryl, and children’s Tylenol.
In April 2010, a key FDA report honed in on “known contamination” in several J&J products and included children’s Tylenol.
The contamination documented “gram negative organisms,” which are bacteria known to cause a slew of infections, including E. coli and cholera.
Inspectors observed contamination including bacteria and metal particles in children’s Tylenol.
It was also determined that the products were not consistently uniform; the exact mixes of the chemicals they were made up of varied, causing some to be too strong, while others were not potent enough.
In September 2010, FDA deputy commissioner Joshua Sharfstien told a congressional committee that one common concern found in the McNeil facility was the failure to investigate and correct product problems promptly.
Interestingly, seven months earlier Sharfstein said: “FDA called an extraordinary meeting with senior executives of Johnson & Johnson. … FDA confronted these executives about whether [its] corporate culture supported a robust quality system to ensure the purity, potency and safety of its products.”
Sharfstein brought attention to J&J’s phantom recall of Motrin tablets in the spring of 2009.
The FDA inspections lead to J&J's mandatory issue of true recalls of a dozen of its consumer products. The FDA also shut down the factory in Pennsylvania so that it could make repairs and implement safer methods and retool its entire method; process.
“We are pleased that the court of appeals agreed with our argument that Oregon’s Unlawful Trade Practices Act [UTPA] requires a company to inform consumers when the company knows that a product is at risk of being defective,” a spokeswoman for the Oregon attorney general’s office said.
The appeals court ruled that, "A seller’s failure to disclose a known risk of some significant event or circumstance bearing materially on a buyer’s purchasing decision is an actionable misrepresentation of a ‘characteristic’ and ‘quality’ under the UTPA."
As we reported, J&J earlier this year agreed to pay a $20 million criminal fine and plead guilty to selling children's over-the-counter medications including Tylenol and Motrin contaminated with metal particles.
“This plea agreement fully and finally resolves the federal government’s investigation, and closes a chapter on actions that led the company to review and significantly improve its procedures,” Carol Goodrich, a spokeswoman for McNeill’s Consumer Healthcare division, said in March regarding the criminal fine.
The Department of Justice said in March that it would “continue to be aggressive in pursuing and punishing companies such as McNeil that disregard a process designed to assure quality medicines, especially [Over the Counter] drugs for infants and children.”
And in March, J&J’s McNeil subsidiary, in a statement, referenced its 2011 agreement with the FDA regarding its manufacturing facilities in Pennsylvania and Puerto Rico.
A permanent injunction by a federal court in 2011 required McNeil to make certain “remedial measures” before it could reopen its Fort Washington facility, according to a Department of Justice (DOJ) statement.