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Johnson & Johnson Settles Lawsuits Over Contact Lenses

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April 18, 2001, Section C, Page 8Buy Reprints
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Johnson & Johnson has agreed to pay as much as $860 million to settle lawsuits accusing the company of misleading consumers into prematurely throwing away disposable Acuvue contact lenses.

The suits contended that the company drove up sales of its 1-Day Acuvue soft lenses by advising consumers to use them just once, even though the product is identical to regular Acuvue lenses, which may be worn as long as two weeks.

Under the settlement, Johnson, based in New Brunswick, N.J., would pay as much as $840 million in cash and coupons to consumers, according to papers filed Monday in state court in New Jersey. The agreement also includes money for new eye exams and $20 million in fees for consumers' lawyers, whose suits were combined into a class action.

Johnson & Johnson said it was too early to determine the ultimate cost of the settlement, which will depend on how many consumers participate. The company has already set aside money for some of the case's costs and does not expect to take a future charge against earnings.

''We've agreed to settle this class-action lawsuit for a very modest outlay,'' Jeffrey Leebaw, a company spokesman, said. ''We're confident that the settlement will not have any significant impact on Johnson & Johnson's financial results.''

The company also said today that first-quarter profit rose 14 percent, outpacing a 6.5 percent gain in revenue, on improved sales of its most profitable products, like the Procrit anemia drug. Net income rose to $1.5 billion, or $1.06 a share, compared with $1.31 billion, or 93 cents a share, in the period a year earlier. Sales rose to $7.79 billion.

Analysts had expected the company to earn $1.04 a share, according to Thomson Financial/First Call.

Shares of Johnson & Johnson rose $1.85, to $94.45.

A version of this article appears in print on  , Section C, Page 8 of the National edition with the headline: Johnson & Johnson Settles Lawsuits Over Contact Lenses. Order Reprints | Today’s Paper | Subscribe

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