Ortho sentenced for obstruction of justice.
The pharmaceutical company, a subsidiary of New Jersey-based Johnson & Johnson, was ordered to pay $7.5 million in fines and costs as part of a plea bargain reached with the U.S. Department of Justice. ( U.S. v. Ortho Pharmaceutical Corp., Crim. No. 95-12 (WGB) (D.N.J. Jan. 11, 1995).)
The sentencing was the culmination of a four-year Justice Department investigation into allegations of Ortho's involvement and cover-up of an illegal promotion of Retin-A as an anti-aging drug.
In 1971, the Food and Drug Administration approved Retin-A for the treatment of acne. Because the agency never approved the drug for any other use, it can only be legally marketed as an acne remedy.
In the mid-1980s, Ortho executives decided to market Retin-A as a drug that could reduce the signs of aging, according to a sentencing memo filed by the Justice Department in January. The memo outlines the history of the marketing campaign and the company's attempts to cover up evidence of its involvement in it:
* In 1988, the company held a press conference to release the results of a study showing the drug's anti-aging effects.
* Shortly after the conference, several doctors made appearances on television and at medical seminars attesting to the drug's ability to remove wrinkles. Many of these doctors had been recruited and coached by Ortho's public relations firms. For example, the doctors were given "key message points" to touch on during their appearances. One of these was a statement that Retin-A could reverse skin damage caused by sun exposure.
* In late 1990, the FDA asked the Justice Department to investigate whether Ortho had engaged in an illegal promotion of Retin-A for an unapproved use.
* In early 1991, Ortho executives learned that a Justice Department investigation was under way and ordered employees to destroy documents and videotapes that would show that the company had engaged in an effort to promote Retin-A's anti-aging abilities to the general public. Employees shredded thousands of documents in one day and were instructed not to tell anyone about what they had done.
The company's marketing efforts and the cover-up were kept secret until late 1992, when an employee who was being prepared to testify before a grand jury in the Justice Department's investigation told Johnson & Johnson's lawyers about the shredding. The lawyers told Justice Department prosecutors, who began to investigate the company for obstruction of justice.
Ortho was charged with obstruction of justice in January of this year. In an agreement with prosecutors, the company pleaded guilty to 10 counts of obstruction of justice.
It also agreed to pay $5 million in penalties and $2.5 million as restitution to the government for the cost of the investigation. The fines are the maximum the Justice Department could ask for, according to Kenneth Jost, one of the prosecutors in the case.
Investigation and prosecution of individual Ortho employees continue. In January, the former head of the company's Dermatological Division, Lester Riley Jr., was indicted on charges of conspiring to defraud the federal government and corruptly persuade others to destroy documents pertinent to an official proceeding. (Steven Coleman, Ex-Ortho Exec Indicted in Shredding, Newark Courier-News, Jan. 12, 1995, at A10.) Riley claim he is innocent. If he is found guilty, he faces up to 35 years in prison and a $1 million fine.
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|Title Annotation:||Ortho Pharmaceutical Corp.|
|Date:||May 1, 1995|
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