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Ortho Pleads Guilty to Obstructing Justice, to Pay $7.5 Million

January 11, 1995

NEWARK, N.J. (AP) _ A Johnson & Johnson subsidiary pleaded guilty today to obstructing a federal investigation of charges that it illegally promoted a prescription acne drug as a skin wrinkle remover.

``Thousands of documents″ relating to the investigation of Retin-A were shredded by employees at Ortho Pharmaceutical, based in Raritan, a J&J spokesman acknowledged Wednesday.

Despite the admission regarding the shredding, J&J continued to maintain that its promotion of Retin-A was proper. Under the terms of a plea bargain with prosecutors, the company cannot be further investigated for its promotion of Retin-A.

Federal law allows doctors to prescribe any approved drug for any purpose they deem valuable, but it prohibits the manufacturers from promoting uses not approved by the Food and Drug Administration.

Ortho pleaded guilty in U.S. District Court to obstructing justice, conspiracy to obstruct justice, and eight charges of corruptly persuading others to destroy documents. Ortho will pay a $5 million fine and $2.5 million to cover the cost of the investigation.

``The document destruction was absolutely wrong, and should never have occurred,″ said Ralph S. Larsen, chairman and chief executive of New Brunswick-based J&J. ``The company must and does take responsibility for this deplorable event. This unfortunate experience is one we all deeply regret and must assure will never happen again.″

The government has been investigating the Retin-A case for four years, trying to determine if J&J was wrong to publicize independent medical studies that showed the drug, applied in a cream, could be helpful in reducing wrinkles. The FDA has not approved its use for wrinkles.

J&J, the world’s largest health care products company, has denied the shredding hindered the government investigation and said it cooperated in the probe.

The shredding was discovered in late 1992 by J&J and reported to prosecutors, who had been unaware of the destruction, J&J said.

Three ``senior Ortho employees″ were dismissed after the shredding was discovered, J&J spokesman F. Robert Kniffin said. He declined to name them.

Ortho’s guilty pleas will close the Justice Department probe, J&J said.

Kniffin would not specify what information was in the shredded papers, but asked if they were duplicative or redundant, Kniffin said, ``In part, yes.″ He declined to elaborate.

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