J&J Board Report Explores Causes of McNeil’s Compliance Breakdowns

A report on an inquiry by a committee of J&J board members into the firm’s recent compliance problems provides insights into how staff reduction, acquisition integration, and communication gaps between operations, company management and the board can contribute to compliance breakdowns in a big pharma organization.

While the inquiry found the board members not guilty of “breaching their fiduciary duties,” it was revealing on the factors that contributed to numerous recalls, a warning letter and a consent decree at McNeil.

The root causes discovered serve as cautionary notes that bear consideration by other big pharma firms regarding their acquisition, staffing, and intra-company communication practices.

The inquiry stemmed from allegations by company investors beginning in late 2009 that wrongdoing by J&J officers resulted in its compliance problems.

In June 2010, the J&J board created a special committee made up of recently-added outside board members to investigate the claims.  The committee “accessed databases…comprising over 21 million pages” to review: ● quality issues at McNeil ● quality issues at other J&J operating units ● off-label promotions ● kickback concerns, and ● alleged violations of the Foreign Corrupt Practices Act.

[Analysis of the report’s findings and a link to the report itself are provided for subscribers here.  Nonsubscribers can purchase the report for $95 by contacting Karen Bertani (Jonathan@ipq.org).  For subscription/license information, click here.]