California investment firm wants Johnson & Johnson to take accountability for Levaquin-related injuries

A California investment firm that owns shares of Johnson & Johnson wants the drugmaker?s management to be held accountable for tendon injuries, irreversible nerve damage and other serious side effects allegedly suffered by people who have used the widely prescribed antibiotic Levaquin.

In a shareholders? proposal, Harrington Investments, which describes itself as socially responsible firm, asks the company?s management to describe new initiatives it will institute to address the health and financial concerns of patients harmed by the medicine.

New Brunswick-based Johnson & Johnson faces tens of thousands of lawsuits filed by individuals who claim they were injured by the drug. The company has strengthened warnings about Levaquin?s dangers multiple times since its approval in 1996. Meanwhile, it has continued to be one of the company's biggest selling medicines. In 2010, It generated $1.5 billion in sales for Johnson & Johnson, according to IMS Health.

While mass tort cases against drug makers are not new ? Merck, Roche and Bayer have each faced similar massive lawsuits over safety issues with their drugs ? they can cost a company billions of dollars. The court battles can be costly in other ways, too. They have helped to tarnish the image of giant pharmaceutical companies that make their profits on the premise that their medicines help people. The proposal by Harrington Investments is another tactic to raise questions about the company?s decisions as well as its responsibility to patients.

Jack Ucciferri, the director of research and advocacy for Harrington Investments, said the extent of the litigation was one of the things he considered when he decided to submit the shareholders? proposal, which the company is already trying to keep off its annual proxy statement.

?When something generates this much litigation and this much negative attention maybe it?s time to take a look at whether the product is worth the hassle ? and the expense,?? Ucciferri said. ?We were appalled at the number of lawsuits.??

Johnson & Johnson spokesman William Price said the company has formally asked regulators with the Securities and Exchange Commission to disqualify the shareholders? proposal. The company, he said, has addressed the safety issues related to Levaquin with warnings. ?We?re very sensitive to the issues,?? Price said.

But Sanford Lewis, a lawyer who specializes in corporate responsibility, said he plans to submit the proposal to the SEC where regulators will decide whether it should appear on Johnson & Johnson?s proxy statement for shareholders to vote on.

The shareholders? proposal is intended to raise a question to management about what can be done, outside of litigation, ?for people who are suffering from the effects of Johnson & Johnson?s drug.??

?Issues that are of a moral or ethical concern are considered something that should be brought to the shareholders,?? Lewis said. ?Shareholders want to know the company is doing something.??

There are other examples of shareholders? proposals that have required companies to answer for harmful events, Lewis said, citing Union Carbide?s Bhopal disaster as one of them.

Paul Hodgson, senior research associate with Maine-based corporate governance researcher GMI, said shareholder proposals are often disqualified based on the SEC?s ?ordinary business rule.?? The rule applies when the company and regulators believe shareholders are trying to make decisions for management, Hodgson said.

However, he said there are reasons why the issue of drug safety would be appropriate to raise to management. ?If a drug is the subject of large litigation,?? he said, ?it can affect the company?s bottom line and that is of concern to shareholders.??

Levaquin, which has been on the market for 14 years, belongs to a class of powerful antibiotics known as fluoroquinolones. The drug was originally approved as a treatment for serious bacteria infections or infections that have not responded to other medicines, but by 2002, the antibiotics were among the most frequently prescribed drugs.

Johnson & Johnson?s label always warned about the possible risks of tendon ruptures, but as the number of adverse effects began to climb with the widespread use of the drugs, patient advocates started pushing for stronger warnings. Some of the earliest efforts occurred in 1996. Then in 2008, Public Citizen filed a lawsuit against the Food and Drug Administration in an effort to have a so-called black box warning included on the packaging of antibiotics like Levaquin. The black box is considered the strongest warning that can be put on drug packaging.

Last year, Johnson & Johnson and other drug makers were required to add a second black boxes, warning that the antibiotics could worsen myasthenia gravis symptoms ? a condition that causes muscle weakness and difficulty breathing when the chest wall muscles are affected.

Sidney Wolfe, the director of Public Citizen?s Health Resource Group and an outspoken advocate for patient safety, said the issue of drug safety has been raised before by shareholders, sometimes by people who will buy a single share of stock in a pharmaceutical company just so they can attend the annual meeting and address management.

Still, stockholders also benefit from big-selling medicines and, like management, they may find profits more compelling than a drug?s problems. Johnson & Johnson, he said, could have prevented both injuries and lawsuits, but that would have ended up costing it big sales from Levaquin.

?The company had every ability to do something earlier,?? Wolfe said, explaining that the dangers of the antibiotics had been known for years. ?But the truth is, the more warning there is on a drug,?? he said, ?it will arguably reduce the use of it.??

John Fratti, a former pharmaceutical sales representative who claims he was injured by Levaquin, addressed Johnson & Johnson?s executives about the drug at a shareholders? meeting several years ago.

He said he supports the idea of the company establishing a program to help patients injured by Levaquin. In some cases, he said, patients are suffering with irreversible tendon and nerve damages.

?It?s going to be a hard battle,?? Fratti said of the proposal from Harrington Investments, ?but you never know.??

Source: http://www.nj.com/business/index.ssf/2012/01/post_151.html

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