Government Takes Over J&J’s Tylenol-Making Factories

A government takeover of Johnson & Johnson’s Tylenol-making factories may cost the company’s over-the-counter medicine sales and harm its credibility even more. The Justice Department and the Food and Drug Administration announced the planned supervision of several of J&J’s McNeil PPC division plants last week.

The agreement, known as a consent decree, will most likely cost J&J between $50 million and $100 million. Plants in Las Piedras, Puerto Rico, Fort Washington, Pa. and Lancaster, Pa. will face at least five years of regulatory oversight. The Fort Washington plant is currently shut down due to violations, and can only open its doors once the FDA grants approval.

Problems with J&J’s manufacturing have led to a series of recalls that most recently included more than 384,000 insulin-pump cartridges that may leak and give a too-low dose. Children’s Benadryl and Motrin products, Tylenol Cold Multi-Symptom products, and hip implants made by J&J’s Depuy Orthopedics are included in the string of recalls. J&J has lost an estimated $900 million in sales due to recalls in the last year. The company will not pay any upfront fine or close down any plants in the immediate future.

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