Drug fiends: even inside Johnson & Johnson, public safety can take a back seat to profits.

• Author: Mintz, Morton

In your hall closet, just above the freshly folded towels, there probably waits a white and pink bottle of Johnson's baby powder. For years it has soothed sore bottoms or dried sweaty palms or simply sat there, a symbol of continuity. It's a product your mom used, maybe your grandmother. It's something you can trust.

That's precisely how its maker, Johnson & Johnson (J&J), wants you to feel. For a century, the world's largest health care conglomerate has successfully promoted its integrity and concern for consumer well-being as it sold Tylenol, Band-Aids, and a shampoo that promises "no more tears." Unlike Upjohn, soiled by the Halcion scandal, or the pushers of Selacryn or Oraflex or Versed, J&J has managed to preserve its fine reputation, not just as a money machine, but as an exemplar of ethics in commerce. One of only a handful of blue-chip corporations that have developed progressive benefits for their workers - offering family leave, helping employees care for their children and elderly parents - J&J several times has been enshrined by Fortune magazine as one of America's 10 Most Admired Corporations. That gleaming public image is personified by James E. Burke, J&J's chairman and chief executive officer from 1976 until 1989, who has been saluted by BusinessWeek as "one of the most admired executives in America."

No journalist or flack has done as much to crystallize the ethical image of Burke and J&J as did the deranged character who killed seven people in the Chicago area in 1982 by lacing Tylenol capsules with cyanide. J&J's aggressive response - clearing the shelves of Tylenol throughout the nation - underscored Burke's claim that J&J valued people over profits. J&J built its reputation on "helping people to heal," Burke told an audience of tens of millions on "60 Minutes" that year. William Webster, then-director of the FBI, validated that claim, telling Mike Wallace that "the attitude of top management has been first the interest of the public, then assisting law enforcement, and then their own corporate concerns for the product." Later, Ronald Reagan himself blessed Burke for living "up to the very highest ideals of corporate responsibility and grace under pressure."

But the next time you open that hall closet, consider this: Over the past 15 years, J&J and its subsidiaries have been accused of knowingly and needlessly endangering millions of people. A tour through the inner workings of the J&J empire suggests that, in the case of at least four drugs - Zomax, Suprol, Ortho-Novum birth-control pills, and Retin-A - J&J, under Burke's leadership, willfully disregarded public safety in order to push its products.

If these accusations taken together are warranted - and solid evidence supports them - they expose a moral swamp, the sort of shortsighted greed commonly associated with the makers of generic drugs, rarely with the high-minded J&J. They also reveal the remarkable forbearance with which not just the government (particularly in the Reagan era) but society at large treats corporate misbehavior. Today, you probably don't feel any different about that bottle of baby powder, or any less trusting of J&J, than you did five years ago. And far from being shamed for the damage done on his watch, Burke is still lionized for his exacting ethical standards. Upon Burke's retirement, television producer Norman Lear named him chairman of his Business Enterprise Trust, which, according to its press releases, seeks to celebrate corporate acts demonstrating "courage in upholding important business principles and serving the common good." No one had done a better job of revealing J&J's disinclination to do that than did The Washington Post. Yet rather than spurn the man ultimately responsible for the corporation's conduct, the paper's top officer, Katharine Graham, has named him an outside director of her company, which controls not just the Post but NewsWeek.

The story of J&J's sins is an object lesson in one of the great flaws of capitalism - one that is crucial, if a bit unhip, to point out as potentate after potentate chucks his Marx and starts negotiating with McDonald's. You won't hear it from George Bush or the folks at the American Enterprise Institute, but as anyone who doesn't misread history knows, the free-market system can drive even the most noble-seemimg businessmen to rank long-term common good behind short-term business principles - which is to say, profits. More telling than a binder full of Common Cause reports, the story of J&J's maneuverings through the gap-toothed federal drug approval process demonstrates why good government policing - fast, flexible regulation - is so critical, and such a far cry from what we now have. When a corporation freely and repeatedly can do so much harm and then escape meaningful punishment, and when a CEO can stand by while hundreds are injured and some even killed and still be hailed as a champion of corporate ethics, there is something deeply wrong with the way America is doing business.

Ever since J&J introduced Tylenol in the early seventies, it has played hardball with its competitors in the crowded painkiller market - Bayer, Bufferin, St. Joseph's, and the like. So the company was understandably uneasy about the advent in 1971 of an inexpensive pain-relieving device - a one-time purchase - that involved no pill-taking at all. The device, called a transcutaneous electrical nerve stimulator, soothes pain by sending an electric current into the body through electrodes attached at the pain site. Apparently impressed with the product - produced by a small company with few resources to market it - J&J bought up the entire organization. Oddly enough, though, it never promoted the stimulator. J&J's real goal was apparently not preventing pain, but preventing competition. The founders of the usurped company sued, charging that J&J had, among other things, violated the Sherman Antitrust Act. After nearly 15 years of legal battles, J&J settled out of court.

That may have been one competitor down, but by October 1980 there were more anodynes than ever on the market. Tylenol and a dozen variations of aspirin crowded drugstore shelves; behind the counter sat hundreds more painkillers. It was a challenging time for J&J's subsidiary, McNeil Pharmaceutical, to be launching its new prescription painkiller, Zomax - particularly because there was no clear group of people for whom the drug's benefits outweighed its risks. Zomax was on the market for 28 months before McNeil suddenly recalled it. But by that time, so many physicians had been gulled into believing the painkiller to be both safe and useful that they had prescribed it for nearly 15 million people. By the Food and Drug Administration's (FDA) accounting, the drug had contributed to at least 14 deaths.

These deaths followed so-called "anaphylactoid reactions," allergic or hypersensitive responses that commonly lead to a drop in blood pressure, difficulty in breathing, facial swelling, rashing, and itching. Patients going into anaphylactic shock can also lose consciousness. In addition to the 14 who died, more than 2,200 other Zomax users suffered allergic reactions, including 403 for whom the reactions were life-threatening. (It is conventional scientific wisdom that adverse drug reactions are grossly underreported.) In addition, the FDA from the start considered Zomax, the first nonsteroidal anti-inflammatory drug it approved, to be the only drug of its kind to pose a possible cancer risk to humans. Based on an independent review of an animal study, Dr. M. Adrian Gross, a former FDA toxicologist, rated the cancer risk of Zomax "highly significant."

Yet the public has heard little about this. Why? In good part because J&J has worked damn hard to keep it from us. Although more than 600 Zomax product-liability lawsuits were filed in 43 states, McNeil used gag orders to bury damaging information that it had been compelled to turn over to plaintiffs. Washington Post reporters Benjamin Weiser and Elsa Walsh disclosed in October 1988 that McNeil "has taken only three cases to trial, choosing instead to settle cases outside the courtroom without admitting any liability. As part of these settlements, it obtained confidentiality agreements that prohibit opposing lawyers and their clients from...