McNeil Consumer Healthcare, a Johnson & Johnson subsidiary, agreed to pay $25 million and plead guilty to a federal criminal charge for selling medicines contaminated with metal. The products included Infants’ Tylenol and Children’s Motrin. The company recalled hundreds of millions of units of its various consumer brands from 2008-2010 for errors in packaging, labeling and the presence of metal particles.
Johnson & Johnson reported a decrease in sales of $900 million in 2010, due to an inability to keep its products on store shelves and a deficit in consumer trust. But even that $900 million reduced J&J’s total sales by less than 20 percent. Is the $25 million a meaningful penalty? The Pennsylvania plant that produced the contaminated J&J products remains open. It will be subject to more safety measures as part of the new settlement, which begs the question: safety measures that haven’t already been implemented?