(Updates with comment from author of study in 10th paragraph.)
July 8 (Bloomberg) -- Johnson & Johnson, the world’s second-largest maker of health-care products, was sued for at least $70 million by a company that claims it interfered in a contract over distribution of an oral cancer test.
Oral Cancer Prevention International Inc., a private company based in Suffern, New York, sued over a contract it signed in February 2010 with OraPharma Inc., then a J&J unit. OraPharma agreed to distribute OCPI’s Oral CDx Brush Test, which identifies precancerous cells in the mouth, according to the complaint filed in federal court in Trenton, New Jersey.
J&J, which also sells Listerine mouthwash, then grew “extremely concerned about the implications” of a study published in Australia that linked mouthwashes with a high alcohol content to cancer, according to the complaint. J&J did not want to “lend credence to the link between Listerine and oral cancer” by selling both its mouthwash and OralCDx, the complaint said.
“Johnson & Johnson induced OraPharma to breach the sales agreement to suppress sales of and withhold from the public a proven life-saving oral cancer prevention product in order to protect the sales of its mouthwash, Listerine, which has been linked to oral cancer,” said the complaint, filed July 6.
Bonnie Jacobs, a spokesman for New Brunswick, New Jersey- based J&J, said the “company is confident that we have engaged in proper business practices and we look forward to the opportunity to resolve this matter through the legal system.”
Private Equity Firm
In January 2011, a Chicago-based private equity firm, Water Street Healthcare Partners, bought OraPharma from J&J. The company’s main product is Arestin, a locally administered antibiotic used by dentists to treat periodontitis.
In 2009, OraPharma sales representatives promoted Arestin and Listerine to dentists, and company officials believed that “selling OralCDx would double OraPharma’s revenues,” according to the complaint.
Before signing the agreement with OraPharma, J&J failed to disclose that it intended to launch an alcohol-free mouthwash called “Listerine Zero,” according to the complaint.
That product “was carefully branded to conceal the fact that it was developed primarily in response to the Australian mouthwash oral cancer study” and the subsequent drop in Listerine’s Australian sales, according to the complaint.
The Australian study, published in 2008, made no mention of Listerine or any other specific brands, said Camile Farah, one of its authors, in an e-mail.
“That is implied by the reader, based on the studies we have analyzed and the market share of each of the companies that sell mouthwash,” said Farah, deputy head of the School of Dentistry at the University of Queensland in Brisbane.
The American Dental Association, based in Chicago, said in a March 2009 statement that while high alcohol consumption is associated with increased cancer risk, “the weight of the available evidence does not support a connection between oral cancer and alcohol-containing mouthrinse.”
OCPI claims that J&J “never had any intention of allowing OraPharma to sell OralCDx to those dentists most likely to adopt its use in their practices,” according to the complaint.
Rather, it sought to “control and suppress sales of OralCDx to those dentists who J&J considered most likely to recommend the use of Listerine mouthwash to their patients, thereby depriving the public of a known cancer prevention product and destroying OCPI’s dental business,” according to the complaint.
The complaint accuses J&J of fraud, tortious interference with a contract and civil conspiracy. It seeks at least $60 million in compensatory damages and at least $10 million in punitive damages on each of the three counts.
The case is Oral Cancer Prevention International Inc. v. Johnson & Johnson, 11-cv-3878, U.S. District Court, District of New Jersey (Trenton).
--Editors: Mary Romano, Andrew Dunn
To contact the reporters on this story: David Voreacos in Newark, New Jersey at firstname.lastname@example.org; Alex Nussbaum in New York email@example.com.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org; Reg Gale at Rgale5@bloomberg.net