Product News and Recalls

Despite problems, Johnson & Johnson making money

The investment blog Seeking Alpha says Johnson & Johnson is doing quite well financially despite its recent problems – including high-profile and costly recalls of faulty medical devices.

The report notes that Warren Buffett’s Berkshire Hathaway Inc. dropped two-thirds of its holdings in the company, following a $1.1 billion fine from an Arkansas jury that ruled the firm misled doctors and patients about the risks of antipsychotic medication Risperdal.

Johnson & Johnson is also dealing with the fallout of medical device recalls. In 2010, the company recalled 93,000 all-metal hip implants from its DePuy Orthopaedics unit, because of their high early failure rate and tendency to shed toxic metal debris. The company now faces about 8,000 lawsuits in federal and state courts from patients who received those implants, and recently agreed to pay about $600,000 to resolve the first three cases to reach settlement.

The company also recently recalled four different types of transvaginal mesh implants, used to treat urinary incontinence and pelvic organ prolapse, after hundreds women who had the devices implanted filed lawsuits alleging that they caused severe pain and injury.

According to the Seeking Alpha report: “Berkshire believes the company’s profitability will be in question for some time until these numerous infractions clear up.”

The report notes that Johnson & Johnson, like a lot of companies, posted second quarter 2012 earnings that fell short of revenue expectations.

But the report speculates that the Johnson & Johnson’s numbers would look far more impressive if not for the negative impact of currency fluctuations. The company had a favorable sales increase of 3.5 percent, but currency fluctuations created a negative impact of 4.2 percent, the report says.

You should consult with a doctor if you have any ongoing symptoms or health concerns. If you have significant injuries, you should also consult with a lawyer familiar with the DePuy hip implant or transvaginal mesh case to discuss your legal rights.

See the story here:

http://seekingalpha.com/article/824031-johnson-johnson-is-doing-much-better-than-the-numbers-show