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By Evelyn Pringle (about the author)
Become a Fan -- Page 1 of 4 page(s)
More than 500 claimants are seeking "substantial compensatory and, where available, punitive damages," from Johnson & Johnson for injuries and deaths related to the Ortho Evra birth control patch, according to the company's Second Quarter Report filed with the SEC.
However, if legal analysts are correct, J&J ain't seen nothin yet.
Based on the millions of prescriptions written for the Ortho Evra patch since it came on the market in 2002, critics say there are thousands of victims who do not yet realize that an injury or death was caused by the patch.
All total, in 2005, J&J raked in $1.1 billion in sales of contraceptives products but the company says it expects a decline in 2006 because of "labeling changes and negative media coverage concerning product safety," in the company's 2005 annual report said.
However, in July 2006, J&J took measures to make up for the lost sales by drastically increasing the price of contraceptive products paid for by Medicaid programs.
Medicaid purchases contraceptives for low income persons covered under the public health care program. For instance, West Virginia provides contraceptives to about 59,000 low income people each year and J&J was the supplier of 75% of those products.
Suddenly and without any warning, J&J created a budget crisis in West Virginia, and many other states, by increasing the price of birth control pills 20-fold, and raising the price on the Ortho Evra patch from $12.15 to $22.46, according to the Associated Press.
When asked about the price hikes, company spokeswoman, Julie Keenan said the pricing for the pills and the patch was in line with federal Medicaid pricing formulas that change every financial quarter.
Considering the fact that Johnson & Johnson has sold patches to about 5 million women since the device came on the market in 2002, according to Bloomberg News on May 13, 2006, a $10 increase times by 5 million women would make for quite a haul.
In response to the dramatic increase in prices, family planning directors across the country began accusing the company of price gouging government funded health centers. "Nobody believes that Ortho-McNeil had any reason to increase these prices by this amount," said Lon Newman, director of Family Planning Health Services, which operates seven clinics in Wisconsin.
"It's clearly a market manipulation on Ortho's part," he stated.
The increase in costs forced many family planning agencies to stop providing Ortho products to women. In the end, rather than lose all the sales, the company dropped the price of the Ortho patch down to $15, or about $3 more than it was before July 1, 2006, when the company raised the price.
Mainly to suppress negative publicity about the Ortho patch that would have an adverse effect on sales, Johnson & Johnson attorneys have been trying to settle the Ortho Evra lawsuits almost as quickly as they are filed by offering substantial settlements that require the plaintiffs to sign a confidentiality agreement in order to keep the damaging information out of the public eye.
In addition, legal experts say J&J attorneys are fully aware that the cause of the injuries and death alleged in the lawsuits will be easy to prove because the plaintiffs have a "signature disease," described as a condition closely linked to the use of a drug that is otherwise very rare. In this instance, they point out, blood clots, heart attacks and strokes are extremely unusual in teenagers and women of childbearing years, with the only commonality among the victims being the Ortho Evra birth control patch.
Many litigants have already settled their lawsuits and J&J has made it clear to attorneys for other plaintiffs, and the various judges handling the cases, that the company is ready to negotiate settlements in many more cases.
However, the problem with this legal strategy is that J&J no sooner settles a group of lawsuits before another batch get filed. Seven lawsuits were filed in one day in January to include:
Become a Fan -- Page 1 of 4 page(s)
However, if legal analysts are correct, J&J ain't seen nothin yet.
Based on the millions of prescriptions written for the Ortho Evra patch since it came on the market in 2002, critics say there are thousands of victims who do not yet realize that an injury or death was caused by the patch.
All total, in 2005, J&J raked in $1.1 billion in sales of contraceptives products but the company says it expects a decline in 2006 because of "labeling changes and negative media coverage concerning product safety," in the company's 2005 annual report said.
However, in July 2006, J&J took measures to make up for the lost sales by drastically increasing the price of contraceptive products paid for by Medicaid programs.
Medicaid purchases contraceptives for low income persons covered under the public health care program. For instance, West Virginia provides contraceptives to about 59,000 low income people each year and J&J was the supplier of 75% of those products.
Suddenly and without any warning, J&J created a budget crisis in West Virginia, and many other states, by increasing the price of birth control pills 20-fold, and raising the price on the Ortho Evra patch from $12.15 to $22.46, according to the Associated Press.
When asked about the price hikes, company spokeswoman, Julie Keenan said the pricing for the pills and the patch was in line with federal Medicaid pricing formulas that change every financial quarter.
Considering the fact that Johnson & Johnson has sold patches to about 5 million women since the device came on the market in 2002, according to Bloomberg News on May 13, 2006, a $10 increase times by 5 million women would make for quite a haul.
In response to the dramatic increase in prices, family planning directors across the country began accusing the company of price gouging government funded health centers. "Nobody believes that Ortho-McNeil had any reason to increase these prices by this amount," said Lon Newman, director of Family Planning Health Services, which operates seven clinics in Wisconsin.
"It's clearly a market manipulation on Ortho's part," he stated.
The increase in costs forced many family planning agencies to stop providing Ortho products to women. In the end, rather than lose all the sales, the company dropped the price of the Ortho patch down to $15, or about $3 more than it was before July 1, 2006, when the company raised the price.
Mainly to suppress negative publicity about the Ortho patch that would have an adverse effect on sales, Johnson & Johnson attorneys have been trying to settle the Ortho Evra lawsuits almost as quickly as they are filed by offering substantial settlements that require the plaintiffs to sign a confidentiality agreement in order to keep the damaging information out of the public eye.
In addition, legal experts say J&J attorneys are fully aware that the cause of the injuries and death alleged in the lawsuits will be easy to prove because the plaintiffs have a "signature disease," described as a condition closely linked to the use of a drug that is otherwise very rare. In this instance, they point out, blood clots, heart attacks and strokes are extremely unusual in teenagers and women of childbearing years, with the only commonality among the victims being the Ortho Evra birth control patch.
Many litigants have already settled their lawsuits and J&J has made it clear to attorneys for other plaintiffs, and the various judges handling the cases, that the company is ready to negotiate settlements in many more cases.
However, the problem with this legal strategy is that J&J no sooner settles a group of lawsuits before another batch get filed. Seven lawsuits were filed in one day in January to include:
Evelyn Pringle is a columnist for OpEd News and investigative journalist focused on exposing corruption in government and corporate America.
The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.
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