WOMEN pelvic mesh victims suing Johnson & Johnson in one of Australia’s largest health class action legal cases are seeking urgent answers after a report saying the multinational drug company has reduced the pool of assets available if more than 700 women win.
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Finance commentator Michael West said an investigation of Johnson & Johnson’s tax affairs and financial statements shows a deed of cross guarantee between seven of the company’s subsidiaries has been allowed to lapse, potentially restricting available funds if the women’s case succeeds.
The company’s legal firm advised the Australian Securities and Investments Commission in a letter uncovered during the investigation, Mr West said. Until 2017 the seven subsidiaries had guaranteed each others’ debts.
The investigation also revealed the subsidiaries had failed to file accounts, in breach of the Corporations Act.
One of the women registered in the class action, Jo Manion, said women were shocked by the report and had contacted their legal firm, Shine Lawyers, for answers.
“Johnson & Johnson’s record of accountability on mesh is not good so we are concerned by this report and we want to know what’s going on,” Ms Manion said.
“I think it’s fair to say that the history of women and Johnson & Johnson on mesh is that they just want the whole issue to go away.”
Johnson & Johnson communications director Meshlin Khouri did not respond directly to Mr West’s claim that the lapsed deed of cross guarantee would restrict available funds if the women win.
In a statement on Sunday to the Newcastle Herald, Ms Khouri said the company did not agree that matters raised by Mr West had been “properly reported”, but they had been “addressed and resolved with ASIC” and were “unrelated to the litigation”.
“The financial position of Johnson & Johnson Pty Ltd and its subsidiaries, including Johnson & Johnson Medical Pty Ltd, has not changed as a consequence.”
Ms Khouri said the company believed the pelvic mesh class action would “show we have acted ethically and responsibly in the research, development and supply of these products”.
In his report Mr West noted that Johnson & Johnson paid a “reasonable amount of tax” when compared with other multinationals operating in Australia. Over 10 years the company paid $238 million in income tax based on $12 billion in revenue, he found, in an investigation of 20 multinationals sponsored by GetUp! and the Tax Justice Network.
In America more than 50,000 women are suing the company because of serious injuries they allege occurred after mesh surgery. Johnson & Johnson announced it would appeal a $20 million judgment awarded to one woman in April, after a jury found the company’s TVT-Secur mesh device was defectively designed and caused the woman’s injuries. The jury also found the company failed to provide adequate warnings about the risks.
TVT-Secur is one of nine Johnson & Johnson mesh devices subject to the Australian class action, which was cleared for use in Australia in October, 2006 but withdrawn by the company and cancelled by the Therapeutic Goods Administration (TGA) in May, 2012.
Johnson & Johnson continues to market three incontinence mesh devices in Australia that are implanted via the vagina, all classified as IIb or medium to high risk by the TGA, after satisfying requirements of safety and efficacy.
