June 24, 2018
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Johnson & Johnson settles Texas lawsuit for $158M

The Associated Press

AUSTIN, Texas — Texas and a subsidiary of health care giant Johnson & Johnson reached a $158 million settlement in a Medicaid fraud lawsuit Thursday, allowing the drugmaker to pay a fraction of the potential $1 billion in penalties and fines that state officials had initially sought.

The lawsuit was one of dozens of state and federal cases alleging that the company committed fraud by making false or misleading statements about the safety, cost and effectiveness of the expensive anti-psychotic medication Risperdal, and improperly influencing officials and doctors to push the drug.

Janssen Pharmaceuticals Inc., one of the J&J subsidiaries that had been sued, said in a statement it will pay the money to fully resolve all claims in Texas. The company said it is not admitting any liability or fault with the settlement.

Texas Attorney General Greg Abbott, who initially called on the company to repay $579 million that the state’s Medicaid program had spent on Risperdal prescriptions plus up to $500 million in penalties, called the settlement a warning to drugmakers.

But analysts called the $158 million figure a victory for J&J, which made billions off Risperdal, because the deal allowed the company to avoid a much larger verdict in a state with a reputation as an easy place to win big jury awards.

The settlement also is far less than the $327 million Johnson & Johnson recently was ordered to pay in South Carolina and the $258 million it was ordered to pay in Louisiana in Risperdal lawsuits.

Kodak workers, retirees, investors brace for pain

ROCHESTER, N.Y. — The ripple effect from Eastman Kodak’s bankruptcy filing Thursday extends in many directions: Employees are bracing again for layoffs, retirees are fretting over health care coverage, and the photography pioneer’s biggest creditors and stakeholders — from movie studios and big-box retailers to the CEO — are preparing to take the hit financially.

Mayor Tom Richards portrayed the decision to seek Chapter 11 reorganization as more of a psychological blow than an economic one to Rochester, where Kodak had been the engine of commerce for most of the company’s 132 years. Its payroll in the medium-size city along Lake Ontario has slipped below 7,000 from a peak of 60,400 in 1983.

“We have a broader-based economy which is no longer dependent on one industry and one company,” Richards said. “We’re better off for it. Not what I wish this would happen, but it has happened, and we’re just going to need to deal with it.”

Kodak, the company that brought photography to the masses at the dawn of the 20th century and was known all over the world for its Brownie and Instamatic cameras and its yellow-and-red film boxes, was brought down first by Japanese competition and then by its inability to keep pace with the lightning shift from film to digital technology over the past decade.

The company said it has secured $950 million in financing from Citigroup and expects to continue operating and pay its employees while in bankruptcy.

In the meantime, Kodak will try to execute its plan for recovery. Since 2005, it has poured hundreds of millions of dollars into new lines of inkjet printers that are finally on the verge of turning a profit. Home photo printers, high-speed commercial inkjet presses, software and package printing are viewed as Kodak’s new core.

Exxon reaches $1.6M spill settlement

BILLINGS, Mont. — Exxon Mobil agreed Thursday to pay $1.6 million in penalties to the state of Montana over water pollution caused by a pipeline break last summer that fouled dozens of miles of shoreline along the scenic Yellowstone River.

Montana Department of Environmental Quality director Richard Opper said the penalties in the case mark the largest in the agency’s history.

The Texas oil company will pay $300,000 in cash and spend $1.3 million on future environmental projects, according to a copy of the document obtained by The Associated Press.

Also Thursday, Exxon increased its estimate of how much crude spilled into the river during the July 1 accident near Laurel to 1,509 barrels, or more than 63,000 gallons.

That’s up from earlier estimates of 1,000 barrels spilled — a number that Gov. Brian Schweitzer had disputed as too low.

Schweitzer said Thursday that the settlement and revised spill estimate came only after the state pressured Exxon to be more accountable in the aftermath of the spill.

“They’re not prepared to give you any accurate information if you don’t hold their feet to the fire,” the Democratic governor said.

In an emailed statement, Exxon spokesman Alan Jeffers reiterated that the company “takes full responsibility” for the accident.

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