What’s Next for J&J?

May was a bloody month for J&J. The company has been under siege for its poor manufacturing practices and the handling of its fifth recall in just under 2 years. So where does J&J go from here?

Johnson & Johnson has a first class PR mess on its hands. I said it back when J&J decided to sue the American Red Cross, but I’ll say it again – J&J needs serious PR help and if its own staff aren’t up to the task, it needs to hire someone…fast.

For J&J, shielding their CEO isn’t helping the company on the reputation front. J&J’s CEO, William Weldon, gave one media interview before going into hiding. J&J’s cover story is that he’s undergoing a pre-scheduled medical procedure (sounds like liposuction). J&J needs to get its CEO out in front of the public FAST. If he’s not dead, he needs to be doing media interviews from his hospital bed. This shouldn’t be delegated to their official scapegoat (Colleen Goggins).

The company needs to put information about the recall prominently on its website. Instead, J&J has opted to host recall information on a microsite – McNeil Product Recall. The microsite strategy is to diminish damage to the main J&J brand. Unfortunately, the company is past that point.

J&J prides itself on its use of social media – so why isn’t it using those channels to provide updates on the recall and build trust with consumers? It’s probably too late for this, but better late than never.

The company will probably need to roll out some advertisements to build trust. We’ve heard rumors that J&J is looking for famous celebrity moms for an advertising campaign called “You Can Trust Us Again.” The concept is that the celebrity mom will say she trusts her children’s health to J&J and you should too. J&J is also considering other ad concepts. J&J’s probably past the point where this will have an impact, but again, better late than never.

And, we also know the deadline – July 15th. Johnson & Johnson hasn’t taken it’s manufacturing woes seriously. It took a Congressional summons for the company to provide a blueprint to the FDA on how it was going to address this.

More background on the J&J manufacturing mess:

• Time to Fire Weldon?
• The Case of the Phantom Recall
• J&J Gets Congressional Hearing
• J&J CEO Refuses to Testify Before Congress
• J&J’s Drug Recall Checklist
• When the Creed is Greed
• J&J’s OTC Products Recalled (Again)

No Wonder Doctors and the AMA are Scared of Pharmacy Clinics

So I had myself a minor (albeit embarrassing) medical issue and I didn’t want to spend hours waiting to get into my doctor. When you have Medicare, let’s face it, you’re the bottom of the barrel and doctors keep you waiting. I didn’t have that kind of time.

So I found my way over to Walgreens and its Take Care Clinic. I got there and the NP was on her lunch break for another 10 minutes and there were 2 people ahead of me. From registering to actually seeing the NP was a total of 35 minutes (at least an hour faster than if I'd gone to my doctor's office). Once I got into the consult, she spent almost 20 minutes with me. It was one of the most thorough exams I’ve had in years.

This was my first experience with a pharmacy clinic. It’s no wonder why the AMA absolutely hates these things. These clinics represent a huge challenge to physician's way of doing business. But they are decidedly pro-consumer: easy to get an appointment with quality care. My first experience at a pharmacy clinic has made me a believer.

Time to Fire Weldon?

Things at Johnson & Johnson really can’t get much worse. The company was dragged before Congress yesterday to testify as to their failure to protect public health and manufacture children’s medicines that were free of contaminants. The embattled CEO, William C. Weldon, refused to testify, instead sending an underling, who will be the scapegoat for the whole unfortunate affair. Meanwhile, Mr. Weldon is recovering from his “back surgery,” which conveniently took place just days before his planned Congressional testimony (but after he received his Congressional summons).

Mr. William C. Weldon is one of the most highly compensated CEOs in the United States. In 2009, J&J paid him over $22.8 million in salary, stock and “other compensation.” Surely, Mr. Weldon has delivered exceptional value to J&J’s shareholders, right? Nope. Since being named CEO on April 25, 2002, J&J’s stock has been flat. Exactly flat. Closing price of J&J’s stock on April 29, 2002 was $63.43. Closing price of J&J’s stock on May 3, 2010 was $63.31. And J&J’s stock has continued to slide since May 3. Mr. Weldon isn’t exactly delivering shareholder value.

I don’t know Billy Boy Weldon. I’ve never met him and don’t know him from Peter Graves (the two look an awful lot alike in photos). However, I know a thing or two about leadership. He who heads the ship controls the direction. And Mr. Weldon clearly set the direction for J&J over the last decade. On Mr. Weldon’s watch, the company abandoned its famous Credo, instead, focusing on enriching the pockets of executives. On Mr. Weldon’s watch, the company decided to wage holy jihad against the American Red Cross. On Mr. Weldon’s watch, J&J has thwarted FDA oversight and shown a blatant disregard for patient safety.

There’s really only one way out of this mess for J&J and it starts with cleaning house. I don’t wish Mr. Weldon any ill will, but if J&J will ever recover, it needs ethical leadership, it needs to return to its core values (the infamous credo) and it needs to get Americans to believe in it again. A changing of the guard would go a long way to showing America that J&J is finally beginning to take this situation seriously.

Amgen’s Prolia Wins European Approval

For year’s investors have wondered where the next Amgen blockbuster would come from.

Today, we have the answer. Amgen received European approval for its new osteoporosis drug Prolia (denosumab). Approval comes across all EU countries, plus Norway, Iceland and the ever-populous Liechtenstein. GlaxoSmithKline (GSK) will co-market Prolia.

The FDA will be taking up Prolia’s fate in July.

The Case of the Phantom Recall

When I was a young boy, I used to read Hardy Boys novels. Most young folks today have heard of the Hardy Boys, but not actually read them, but all of the books had these overly dramatic titles. Given today’s latest revelations in the Johnson & Johnson (J&J) crisis, I figured an overly dramatic Hardy Boys title was appropriate.

So here is what we learned today. Congress summoned J&J CEO William C. Weldon to Washington to answer for his company’s actions. Unfortunately, last week, Mr. Weldon decided to undergo emergency cosmetic surgery (or was it “back surgery”) so he was unable to attend. Instead, J&J offered up their official scapegoat – Colleen Goggins, Worldwide Chairman of the Consumer Group. And she showed up this morning.

Naturally, we all have this image of J&J rapidly responding to the Tylenol crisis of 1982. J&J has spent millions cultivating that PR image. But, like the tooth fairy, it’s not the truth. Today, we got a look inside the real Johnson & Johnson. A company that, in 2008, understanding that it had a massive manufacturing problem, sent contractors out into stores to buy up all its Motrin products so it wouldn’t have to recall them (dubbed the “phantom recall”). A company that failed to notify the FDA of the problem (“what law?”) and then waited until July 2009 to actually recall the drug. This is the REAL culture at J&J, by the way.

Meanwhile, we’ve learned that the FDA is tracking over 700 active complaints on J&J products. To this point, the company has maintained that the problems were “process anomalies” and there was no risk to patients. However, we now know that at least some of the 700 complaints are being investigated for possible patient harm (investigated does not mean harm exists, but we can’t be taking J&J’s word on it anymore).

Yes, it was a fascinating day to be an observer of pharmaceutical industry. Unfortunately, J&J’s actions reflect poorly on the entire pharmaceutical industry. Those less sophisticated may pick up on media stories and assume that all drug companies behave like J&J – they don’t. Consumers might believe that all drug companies try to hide contaminated products and wait years to address the problem – they don’t.

Back when I used to read the Hardy Boys and go to Cub Scouts, my mom used to say – don’t let one bad apple spoil the bunch. I think that’s good advice.

J&J Gets Congressional Hearing

Tomorrow, Johnson & Johnson gets its day in the limelight at a Congressional hearing on the company’s ongoing manufacturing woes and most recent product recall. The company is offering up its Worldwide Chairman of the Consumer Group, Colleen Goggins, as the official scapegoat for the whole affair.

Meanwhile, over at the official blog, the company has finally offered a shell plan for what it intends to do about this whole affair. While nearly two years too late, it is a positive step for the company. I’ve been highly critical of J&J recently, but perhaps the company is finally turning a corner.

Will it be enough to avoid a consent decree with the FDA? Only time will tell.

The Rise and Fall of the Great Autism Fraud

The recent history of autism and autism research has been dominated by a legend – Andrew Wakefield. The former British physician turned rogue Texas cowboy has been a lightning rod for controversy – on this everyone can agree.

We know that Andrew Wakefield pioneered the early hypothesis that the MMR vaccine caused autism. He was the author on the original Lancet study that struck fear into the hearts of millions of parents – causing tens of thousands of them to skip immunizations. His study single handedly led to the resurgence of measles.

There was just one problem – it was all a fraud. The Lancet has since fully retracted the article as a sham. Dr. Wakefield’s co-authors have apologized and accepted accountability for their actions. The methods of the paper did not have scientific rigor and it appears that much of the data was fabricated. And, earlier this week, Dr. Wakefield’s medical license in the UK has been stripped.

The loss of his medical license in the UK hasn’t been that much of a problem since Dr. Wakefield hasn’t been practicing medicine in Europe for years. Instead, he’s been practicing medicine without a license in Texas at the Thoughtful House Center for Children. In February, just days after I wrote The Great Autism Fraud, Dr. Wakefield “resigned” from Thoughtful House (resigned being a nice euphemism for sacked).

Despite the tremendous personal embarrassment of being caught fabricating scientific evidence and being exposed as the greatest medical fraud of the last 20 years, Dr. Andrew Wakefield may have the last laugh. His new book Callous Disregard: Autism and Vaccines: The Truth Behind a Tragedy hits bookstores on May 26th. While not expected to be a bestseller, it will have a devoted following among the legions of parents that will believe a modern snake oil salesman. Since Dr. Wakefield won’t be able to make money as a doctor doing tests on children, he’ll be able to make some easy cash off book sales. There’s some good news for readers of the book, they will be treated to a special forward in the book by Jenny McCarthy – the discoverer of the Cure for Autism.

The life story of Andrew Wakefield is as timeless as life itself – it’s nothing more than the rise and fall of a fraud.

J&J CEO Refuses to Testify Before Congress

Johnson & Johnson’s (J&J) credibility woes continue as the company’s CEO, William Weldon, has refused to testify before Congress. He was summoned to appear at an upcoming hearing on May 27th to justify his company’s handling of five recalls over the last two years.

J&J’s excuse is that Mr. Weldon has had “back surgery.” Mr. Weldon’s “back surgery” was previously scheduled; however, he refused to postpone the surgery upon on learning of the Congressional summons last week. Despite the fact that other individuals in similar situations have prepared video testimony or even done satellite testimony, J&J appears to want to shield Mr. Weldon from accountability and responsibility. As I’ve said before, it’s a shrewd legal move from J&J, but is tanking whatever credibility the company has left.

J&J seems to be offering Colleen Goggins, Worldwide Chairman of the Consumer Group for J&J, as the scapegoat for this situation. She’ll get to handle the tough questions and then J&J will give her a package and usher her out the door.

You have to wonder how seriously J&J takes this situation that Mr. Weldon would not postpone his surgery after learning of his Congressional summons. A surgery that can be “previously scheduled” is not a medical emergency. Certainly, if Mr. Weldon cared about the children his company has exposed to contaminated products, he might have made a different decision.

J&J’s Drug Recall Checklist

Nobody in America is more thankful for the BP oil spill than Johnson & Johnson CEO William Weldon. BP’s oil crisis deflects some of the popular media attention off J&J’s massive drug recall and the company’s ongoing manufacturing problems. The recall of over 40 J&J products in earlier this month is the 5th major recall of J&J products since the company was notified of significant contamination of its products back to late 2008.

So, far, J&J’s approach to the recalls have been typical for the company – slow and insufficient. But that’s J&J’s approach (they call it “Slow Cooking” – taking your sweet time).

J&J’s approach to this recall has been formulaic:

• Issue a press release late on Friday and hope nobody notices (Check)
• After massive media criticism, post an anemic defense of your company on your corporate blog (Check)
• Give confused parents a website that doesn’t really provide any answers (Check)
• Give confused parents a phone number to call with questions, where they get a pre-recorded message that reads them the press release or a representative that can’t answer any questions (Check)
• Ignore media’s phone calls (Check)
• Issue a passive letter from your CEO that doesn’t accept any accountability and says, “I have been assured that the chance of a serious medical event from the recalled products is remote.” (Check)
• Let your CEO do a video interview on a financial website to try and restore investor confidence and thwart shareholder lawsuits (Check)
  

Here is what’s next for J&J:

• Now that J&J has received it’s “invitation” to have Bill Weldon testify before Congress, it needs to give Weldon a personality transplant (or at least coaching). Ditch the confused and arrogant CEO who won’t accept any responsibility, and find one who has some empathy for the children and parents.
• Your much-discussed “You Can Trust Us Again” advertising campaign seems insincere and misguided. J&J needs credibility, and this isn’t going to do that. Ditto for the idea of having celebrities come forward and say, “I trust McNeil products for my child.”
• When your CEO Bill Weldon testifies before Congress on May 27, he better have real answers to the questions and he needs to be believable.

My expectations for Johnson & Johnson are low. They’ve known about their manufacturing problems for two years and done nothing. They’ve known about their credibility problem for several years and done nothing. I know J&J is “Slow Cooking,” but it shouldn’t take years for the company to behave responsibly. The company’s infamous credo which guided it through the infamous Tylenol Tampering of 1982 is nothing more than distant history.

When the Creed is Greed

Johnson & Johnson continues to implode. The company has managed to completely fuck up decades of goodwill. In the last year, J&J has had four major product recalls – each of them has been bungled badly. Last year, the company waited over a year before notifying the FDA of manufacturing problems.

So Johnson & Johnson finds itself in the midst of yet another product recall – and they are doing their best to handle it poorly. In this latest round, J&J only took two weeks in getting the word out to parents. Just like in the past (like when J&J decided to sue the Red Cross), J&J communicated its product recalls on its official blog – J&J By The Way. Once again, J&J has demonstrated its communications strategy – communications is a “by the way” afterthought. Naturally, on the JNJBTW blog, J&J spokesman Marc Monseau has suffered through an onslaught of angry parents. And why shouldn’t parents be angry?

J&J has mismanaged its manufacturing for years (and now everyone knows it). J&J’s communications strategy continues to be…well…an afterthought. Issuing a press release late on a Friday night to ensure minimal notice is not the hallmark of an ethical company. J&J seems more concerned with getting the bottles out of the hands of parents – not to ensure that kids don’t take the medicines, but to limit the company’s future liability in lawsuits.

I feel badly for J&J. Like nearly everyone in America, J&J has been there my entire life. It’s sad to see the company descend from one of America’s most admired and most ethical, into one that has abandoned its creed in favor of greed.

J&J’s OTC Products Recalled (Again)

On April 30, Johnson & Johnson announced it was recalling 43 of its OTC medications. During a recent FDA inspection, the agency found significant deficiencies in J&J’s manufacturing processes resulting in purity, potency and quality problems with a large number of J&J’s OTC products on the market.

The manufacturing deficiencies described by the FDA seem to have existed for some time. It seems possible that the problems have existed since the last J&J recall of products dating back to January (see more in A Tale of Two Recalls). This makes me wonder if J&J ever took corrective action from the last round of product recalls.

Personally, I want to congratulate Johnson & Johnson on doing a much better job of handling this situation. The last time J&J had this problem, details emerged in 2008, the company waited over a year to notify the FDA (December 2009) and then waited again until January 2010 to tell consumers. However, in this case, J&J waited only two weeks to notify consumers! This is a very positive development for J&J and I want to congratulate them on this!

Consumers can get more information at the McNeil Consumer Healthcare Product Recall Information website.

Snowbirds Flying North

Like many a snowbird, Pharm Aid has flown North this week. After almost two months, Pharm Aid is back!

Thanks for your patience!