Johnson & Johnson to pay $22.9m to settle product recall lawsuit

The vast product recall also affected the company’s shares in 2010.

New Statesman
J&J's Tylenol drug was also part of the product recall. Credit: Getty Images.

Diversified healthcare firm Johnson & Johnson (J&J) has agreed to pay $22.9m, or £15m, to settle a product recall lawsuit filed by its investors in 2010, according to papers of a US federal court of New Jersey.

In a class action law suit, the company shareholders alleged that J&J has not maintained quality standards in its non-prescribed drugs aimed for children that eventually led to a huge recall, which the US Food and Drug Administration (FDA) termed as the largest in its history.

In addition, the shareholders also alleged that J&J tried to avoid publicity of facts related to the product recalls.

Ernie Knewitz, a spokesman of Johnson & Johnson, was quoted by Reuters as saying: “We maintain that the claims in this action are without merit, and settled this case in order to avoid the expense, distraction and time associated with continuing litigation.”

The company removed more than 40 products, including Tylenol, from store shelves and closed its factory in Fort Washington, Pennsylvania after a FDA team found bacterial contamination of ingredients and equipment.

The vast product recall also affected the company’s shares in 2010.