The point is that a $1 billion criminal violation in every state would significantly undermine Johnson&Johnson's profitablility, especially if more products are added to this list, and while the company sets aside accruals against these events when the suits are first filed, ultimately these legal costs will drag down the bottom line especially if other firms do not get convicted for fraud or intellectual property violation as often as Johnson&Johnson subsidiaries appear to by the firm's own admission. On the other hand these decisions have been reversed in the past as a successful appeal in West Virginia for similar criminal violations demonstrated in 2010 over marketing DURAGESIC (61-62). If the firm can reduce this deadweight compliance loss than it stands to capture growing baby boomer demand even as shelf price growth is constrained to CPI (Johnson&Johnson 35). One interesting but absent perspective this provokes is that if medical producers limit their growth rates to 'fair return,' they may start to resemble public...

This is often not considered in the business press, but plausible given the concentration of the market into two massive oligopolists already, and positive but eventually non-excludable externalities delivered through R&D, as indicated by the fiercely defended intellectual capital that delivers performance in all three segments, especially if generics outsell brand after patents expire as they continue to ongoing (Johnson&Johnson 36). When these patents expire, JNJ faces significant competition by generics, which, coupled with legal expense and occasionally revenues suing and being sued by a list of competitors that includes Abbot, Bayer & Co. And Roche, as well as numerous smaller firms that compete with Johnson&Johnson subsidiaries, over patent infringement and new generic approval applications (Johnson&Johnson 60). That the firm incurs costs defending their proprietary intellectual property only indicates how dependent JNJ is on innovation, and that health care innovations…