J&J plans to separate into two corporations, separating shopper merchandise and pharmaceutical companies

Health conglomerate Johnson & Johnson announced plans on Friday to spin off its consumer products business from its pharmaceutical and medical device businesses, creating two publicly traded companies. The news sent stocks up in pre-trading hours.

The separation will separate the Household Products division, manufacturer of patches, Aveeno and Neutrogena skin care products, and Listerine from its riskier but faster growing division that makes and sells prescription drugs and medical devices, including his Covid-19 Vaccination.

“After a thorough review, the board and management team believe that the proposed separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers and healthcare professionals, opportunities for our talented global community Create a team and drive profitable growth, and most importantly, improve health outcomes for people around the world, ”outgoing CEO Alex Gorsky said in a statement.

The company hopes to complete the transaction in 18 to 24 months. The Pharmaceuticals and Medical Devices division, which includes advanced technologies such as robotics and artificial intelligence, would keep the Johnson & Johnson name and keep J & J’s new CEO Joaquin Duato at the helm.

Gorsky told CNBC that the company has yet to set a name for the new publicly traded consumer business.

He said the decision to liquidate the company had been discussed by his board of directors since “it came” as it would present “tremendous opportunities” to stakeholders.

“It is in the best long-term interests of all of our stakeholders,” he continued.Squawk box. “” Our goal is to create two world leaders – a pharmaceutical and medical device business that has huge potential today … and of course the iconic brand consumer business. “

Duato will take on the role as planned in January. These segments are expected to generate sales of around $ 77 billion, while the consumer goods division is expected to sell around $ 15 billion in products this year, the company said.

His yet-to-be-named consumer products company will also inherit litigation arising from lawsuits over allegations that its Johnson’s Baby Powder causes cancer, allegations the company has vehemently denied.

Gorsky said the consumer division has four brands alone with annual sales of more than $ 1 billion. The separation will allow the company “even more agility” and “better opportunity to allocate capital,” he said.

J & J’s shares rose more than 3% in pre-trading hours following the announcement.

With Gorsky’s departure as CEO, J&J already went through a major transformation. He will remain in office as Executive Chairman of the new J&J, the company said.

In addition, the company planned to keep the total dividend “at least at the same level” after the change. J&J currently has a dividend yield of around 2.6%.

The announcement comes just a few days later General electrics said it plans to split into three separate publicly traded companies and to spin off its medical and energy divisions from the aviation division.

– CNBCs Berkeley Lovelace Jr. contributed to this report.

Pharmaceutical Gross sales Consultant Admits Well being Care Fraud Conspiracy and Conspiring to Interact in Cash Laundering and Impede Justice | USAO-NJ

CAMDEN, NJ – A pharmaceutical sales rep admitted today that he was conspiring to defraud New Jersey County’s health programs and to engage in money laundering and obstructing justice, US Attorney General Rachael A. Honig said.

Paul Camarda, 39, of Holmdel, New Jersey, pleaded guilty to U.S. District Judge Robert B. Kugler in Camden Federal Court over information alleging a health fraud and obstruction of justice conspiracy and engagement Money laundering.

According to documents filed in this case and statements made in court:

Camarda was a sales representative for a pharmaceutical company. He started a side business called Dynasty Capital LLC to independently commercialize medical products and services for other businesses, including compound prescription drugs for specialty pharmacies. Camarda marketed compound drugs for several pharmacies, including New Jersey and out of state pharmacies, identified in court documents as “Compounding Pharmacy 1”, “Compounding Pharmacy 2”, “Compounding Pharmacy 3” and “Compounding Pharmacy 4”. As part of his agreements with the pharmacies and his conspirators, Camarda received a percentage of the insurance payments he received for prescriptions arranged by him and his staff.

Compound drugs are specialty drugs that are mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compound drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a doctor determines that an FDA-approved drug, such as dye or other ingredient, does not meet a particular patient’s health needs.

Camarda learned that certain local government employees had insurance coverage for these particular compound drugs. A facility identified as a “pharmacist benefits administrator” on court documents provided pharmacy benefits administration services for the Bergen County’s Prescription Benefits Program (BCPBP), which covered certain local government employees, including county jailers. The pharmacy benefits administrator paid prescription drug claims and then billed the BCPBP for the amounts paid.

Camarda was a leader and manager of the conspiracy. He and his conspirators discovered that certain compound drugs – including vitamins and pain, scar, antifungal, migraine, and libido creams – reimbursed up to thousands of dollars for a month’s supply. Camarda recruited individuals with BCPBP coverage to fraudulently obtain medically unnecessary compound drugs. He provided the recruits with blank prescription forms and directed them to see an unnamed doctor – referred to as “Person 1” in court documents – to obtain his approval for the compound prescription drugs. The investigation found that all recruits visit Person 1 to get the prescriptions within days, and all Person 1 received prescriptions authorized by Person 1 for the same specialty drugs on the same day or within days. The recruits agreed to receive the very expensive compound drugs, not because they needed them, but because they were paid for by Camarda. Camarda instructed the recruits that the more compound drugs they were given and the more people they recruited to get the drugs, the more money they could make from the conspiracy.

Camarda received more than $ 2.2 million in payments for the prescriptions he and his staff arranged, and Camarda and his recruits created more than $ 3.4 million in fraudulent claims filed by the pharmacy benefits administrator for compound drugs were presented. Camarda’s payments from the blending pharmacies and his conspirators, as well as Camarda’s payments to his recruits, served as the basis for the money laundering conspiracy charge, which Camarda pleaded guilty to.

In 2017, Camarda learned that federal agents and a federal grand jury were investigating the health fraud conspiracy. Camarda has plotted to obstruct the federal investigation by providing and instructing false information to other federal agents and the grand jury.

The number of healthcare conspiracies Camarda is guilty of has a maximum potential sentence of 10 years in prison and a fine of $ 250,000 or double the gain or loss from the crime, whichever is greater. Obstruction of justice and the money laundering conspiracy count carry a maximum penalty of five years in prison and a fine of $ 250,000 or double the gross profit or loss of the crime, whichever is greater. The conviction is scheduled for November 18, 2021.

Acting US Attorney Rachael A. Honig has credited special agents to the IRS Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; Special Agent for the FBI’s Atlantic City Resident Agency under the direction of Special Agent in Charge George M. Crouch Jr. of Newark; and special agents from the US Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, whose investigation resulted in today’s admission of guilt.

The government is represented by US Assistant Attorneys Christina O. Hud and R. David Walk Jr. of the US Attorney’s Office in Camden.