Product claims over anti-psychotic drug hit profits at Janssen Cork company

Profits fell by a third at Johnson & Johnson’s Janssen unit in Cork as sales fell and it made a €46.9 million provision for personal injury claims relating to products in 2018.

Janssen Pharmaceutical Sciences Unlimited Company reported profits of €205 million on sales of €605 millions – 20 per cent lower than the turnover of €755 million reported in 2017.

In accounts just filed at Companies Office, Janssen directors confirm the company received personal injury claims relating to the anti psychotic drug, Risperdal and related products sold by the company. The €46.9 million provision in 2018 follows a provision of €48.2 million in 2017.

A note attached to the accounts states that Risperdal lawsuits have been lodged in the US and Canada courts with affiliate companies. Under the sales agreement with those companies, the Irish based unit bears the product liability risk.

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"Consequently, the directors regard Janssen Pharmaceuticals Sciences Unlimited as legally responsible for the product liability expensed and costs associated with these matters."

They note that further “product liability lawsuits continue to be filed and the company continues to receive information with respect of potential costs and the anticipated number of cases”. The directors state that the provision is continually adjusted to reflect the situation.

Last October, a Philadelphia jury hit Johnson & Johnson with an $8 billion verdict over its marketing of Risperdal in the case of a Maryland man who argued the healthcare giant downplayed risks that the drug could lead to breast growth in boys.

The verdict was the first to award punitive damages against Janssen Pharmaceuticals. Johnson & Johnson said in a statement after the ruling that the verdict stood in “stark contrast” to the amount for compensatory damages and that the company would be “immediately moving to set aside this excessive and unfounded verdict”.

It is not unusual for such massive verdicts to be reduced.

Separate accounts for another Cork based Janssen unit, Janssen Sciences Ireland Unlimited show that the company paid out a dividend of €6.98 billion in 2018 as pre-tax profits rose 22 per cent to €2.7 billion. Revenues at the company increased by 29 per cent to €7.7 billion.