Johnson & Johnson Receives Millions in Subsidies in RI, Ordered to Pay $572M in Opioid Case

Johnson & Johnson Receives Millions in Subsidies in RI, Ordered to Pay $572M in Opioid Case

In a landmark lawsuit, an Oklahoma judge ordered Johnson & Johnson to pay $572 million for contributing to the state’s opioid-addiction crisis, a verdict that could have massive implications for lawsuits now pending across the country relating to the opioid epidemic.

A group headed by Purdue Pharma agreed to pay $270 million, while a group headed by Teva Pharmaceuticals USA Inc., agreed to pay $85 million.

More than 2,000 cases brought by state and local municipalities seek to hold drugmakers, retail pharmacy chains and distributors accountable for widespread opioid abuse that began gaining public attention in the early 2000s. That flood of litigation coincides with intensifying efforts by the Justice Department to use data to investigate over-prescription of opioids by doctors.

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In Rhode Island, Johnson & Johnson was awarded millions in incentives, subsidies and tax credits to build out new space on Ship Street in Providence and create 75 high tech healthcare jobs. It was supposed to be the beginning of potentially something much bigger for Rhode Island.

The package approved by Rhode Island Commerce Corporation in January of 2017, was robust, "incentives up to $4,425,860 in foregone state revenue, up to $1 million in renovation and fit-out costs at 1 Ship Street, and up to $700,000 in workforce services and talent attraction grant funds.”

In total, it was a more than $6.1 million package for 75 jobs -- $81,333 in subsidies per job.

Rhode Island officials knew the cost was high, but the potential was to lure a top U.S. corporation to the state with the potential to create hundreds or thousands of new jobs. Johnson & Johnson is an $81 billion company which employs more than 130,000 employees globally.

Johnson & Johnson Cuts Commitment in RII

As GoLocal previously reported, the $1 million to build out Johnson & Johnson’s space at 1 Ship Street in the Jewelry District proved to be wasteful as the company used the space for less than two years.

As the Wexford Innovation Center was being developed it was agreed between Commerce RI and Johnson & Johnson that the company would move from the newly built on Ship Street to Wexford.

Johnson and Johnson was scheduled to take a full floor in Wexford — 25,000 square feet for their 75 employees and for potential future expansion.

But now Johnson & Johnson has slashed their space needs and only leased 40 percent of what they planned — just 10,000 square feet in Wexford.