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All around classy company: https://highline.huffingtonpost.com/miracleindustry/americas-most-admired-lawbreaker/ https://highline.huffingtonpost.com/miracleindu

All around classy company: https://highline.huffingtonpost.com/miracleindustry/americas-most-admired-lawbreaker/ https://highline.huffingtonpost.com/miracleindustry/americas... Quote from the article: “Oh, they’ve already reserved for that stuff,” one of them told me during a coffee break. He meant that in Johnson & Johnson’s financials, there had been money taken from earnings and put into a column vaguely called “accrued liabilities,” in order to account for the expected billions that might still have to be paid out in verdicts or settlements. -------- I wonder how their accrued liabilities column looks like for the sunscreen products.

formerly_proven 5y ago
They will settle for 50 million. And sure, that's a lot of money, but not to them, not really. We started a rainy-day fund just for this occasion. The fund itself has already made five times that amount.
infogulch 5y ago
If anybody ever wondered, this is a concrete example of what it looks like when a company treats its negative externalities as a "cost of doing business".
- gameswithgo 5y ago
  That is sort of an inevitable human behavior, you just have to make the cost high enough.
  - loceng 5y ago
    And continue the liability to include the chains of command during the times of malpractice.
- abfan1127 5y ago
  this is interesting. Given the biodiversity of human beings, it should be safe to say that any product may have negative consequences at scale. Certainly the HN crowd can appreciate what it means to work at scale. The fact that J&J knows these consequences exist and plans for them makes them evil? If your company planned on extra engineering resources strictly to assist launch issues, is that evil? Evil comes from them knowing issues and shipping anyways (see the opioid crisis). Being prepared for adverse outcomes is just common sense.
  - romseb 5y ago
    There are benzene-free sunscreen products on the market and J&J could sell such products, but instead they decide not to in order to make more profit.
    - abfan1127 5y ago
      why would they add benzene to products? how does adding it make it cheaper to increase profits? Its not like some shady benzene dealer pays J&J to sprinkle it in, but only at really low levels (2-6 ppm). Its not like they chose benzene as an active ingredient over zinc oxide. Engineers are asked all the time on ways to save money. Did they skip a processing step? is their process control not optimized? Of course they are pressured to improve. Lower costs drive down consumer prices and increase profits (thanks 401k). https://www.medpagetoday.com/special-reports/exclusives/92799 https://www.medpagetoday.com/special-reports/exclusives/9279...
      - an_opabinia 5y ago
        They don’t add anything to their products. Someone in China submits the lowest bid to make the thing, passing on sweatshop savings to J&J. So how then does the manufacturer make a profit? By skimping on the raw materials. The root cause isn’t the supply chain or transparency or QA or whatever. It’s the attractiveness of too-good-to-be-true deals.
  - saiya-jin 5y ago
    One is accepting the risk of not knowing almost infinite amount of chemical interaction of human bodies vs some novel chemistry but still maximizing the safety as its simply the right thing to do for everybody long term, including J&J. The other is accepting the usage of highly-questionable-at-best compounds as part of baby care products, because current bonuses take priority above everything else. Evil comes in many ways. This can be argued is just massive negligence and ignorance, or even arrogance. As a father, when all this topic is paired with babies, I don't mind calling it evil and treat it as such.
    - 5y ago
- WalterBright 5y ago
  In America, you could have a product that saves 1000 lives but kills 1, and you'll get your pants sued off for the one.
  - foerbert 5y ago
    This is one of those things that sounds bad on first glance, but doesn't withstand deeper scrutiny. It's largely either a good thing or else not true. If the 1000 lives were not in imminent danger or else could have been saved by other means, it's not trivially true that only killing 1 in 1000 should be neglected. How does that compare to the alternative methods? Could it have been avoided with small or reasonable changes to the product? Were people properly informed of the risks? There's a bunch of stuff to unpack here. It's not trivially and obviously true that it's A Bad Thing to get sued if you save 1000 lives and kill 1. On the other hand, if you are in the situation where those 1000 people are absolutely going to die imminently, your product has the only possible chance of saving them, and in the end 1 person dies sooner than they would have without treatment... you're not going to see a major and massive lawsuit out of this. You can be sued, but your annoying neighbor can also sue you for being annoying if they want. Doesn't mean it'll go anywhere, or that you'll lose your pants from it.
    - WalterBright 5y ago
      The government provides immunity for vaccine producers because of this. Another example is nuclear power.
- refurb 5y ago
  No, it’s not that at all. Accrued liabilities is a standard accounting practice. It only sounds sinister to you because you don’t know how accounting works. https://corporatefinanceinstitute.com/resources/knowledge/accounting/accrued-liability/ https://corporatefinanceinstitute.com/resources/knowledge/ac...
The_Beta 5y ago
This is standard accounting principles. GAAP/IFRS accounting require you to do this. It's not malicious
intricatedetail 5y ago
If penalty can be labelled as a cost of doing business, is it really a penalty?

formerly_proven 5y ago

They will settle for 50 million. And sure, that's a lot of money, but not to them, not really. We started a rainy-day fund just for this occasion. The fund itself has already made five times that amount.

infogulch 5y ago

If anybody ever wondered, this is a concrete example of what it looks like when a company treats its negative externalities as a "cost of doing business".

gameswithgo 5y ago
That is sort of an inevitable human behavior, you just have to make the cost high enough.
- loceng 5y ago
  And continue the liability to include the chains of command during the times of malpractice.
abfan1127 5y ago
this is interesting. Given the biodiversity of human beings, it should be safe to say that any product may have negative consequences at scale. Certainly the HN crowd can appreciate what it means to work at scale. The fact that J&J knows these consequences exist and plans for them makes them evil? If your company planned on extra engineering resources strictly to assist launch issues, is that evil? Evil comes from them knowing issues and shipping anyways (see the opioid crisis). Being prepared for adverse outcomes is just common sense.
- romseb 5y ago
  There are benzene-free sunscreen products on the market and J&J could sell such products, but instead they decide not to in order to make more profit.
  - abfan1127 5y ago
    why would they add benzene to products? how does adding it make it cheaper to increase profits? Its not like some shady benzene dealer pays J&J to sprinkle it in, but only at really low levels (2-6 ppm). Its not like they chose benzene as an active ingredient over zinc oxide. Engineers are asked all the time on ways to save money. Did they skip a processing step? is their process control not optimized? Of course they are pressured to improve. Lower costs drive down consumer prices and increase profits (thanks 401k). https://www.medpagetoday.com/special-reports/exclusives/92799 https://www.medpagetoday.com/special-reports/exclusives/9279...
    - an_opabinia 5y ago
      They don’t add anything to their products. Someone in China submits the lowest bid to make the thing, passing on sweatshop savings to J&J. So how then does the manufacturer make a profit? By skimping on the raw materials. The root cause isn’t the supply chain or transparency or QA or whatever. It’s the attractiveness of too-good-to-be-true deals.
- saiya-jin 5y ago
  One is accepting the risk of not knowing almost infinite amount of chemical interaction of human bodies vs some novel chemistry but still maximizing the safety as its simply the right thing to do for everybody long term, including J&J. The other is accepting the usage of highly-questionable-at-best compounds as part of baby care products, because current bonuses take priority above everything else. Evil comes in many ways. This can be argued is just massive negligence and ignorance, or even arrogance. As a father, when all this topic is paired with babies, I don't mind calling it evil and treat it as such.
  - 5y ago
WalterBright 5y ago
In America, you could have a product that saves 1000 lives but kills 1, and you'll get your pants sued off for the one.
- foerbert 5y ago
  This is one of those things that sounds bad on first glance, but doesn't withstand deeper scrutiny. It's largely either a good thing or else not true. If the 1000 lives were not in imminent danger or else could have been saved by other means, it's not trivially true that only killing 1 in 1000 should be neglected. How does that compare to the alternative methods? Could it have been avoided with small or reasonable changes to the product? Were people properly informed of the risks? There's a bunch of stuff to unpack here. It's not trivially and obviously true that it's A Bad Thing to get sued if you save 1000 lives and kill 1. On the other hand, if you are in the situation where those 1000 people are absolutely going to die imminently, your product has the only possible chance of saving them, and in the end 1 person dies sooner than they would have without treatment... you're not going to see a major and massive lawsuit out of this. You can be sued, but your annoying neighbor can also sue you for being annoying if they want. Doesn't mean it'll go anywhere, or that you'll lose your pants from it.
  - WalterBright 5y ago
    The government provides immunity for vaccine producers because of this. Another example is nuclear power.
refurb 5y ago
No, it’s not that at all. Accrued liabilities is a standard accounting practice. It only sounds sinister to you because you don’t know how accounting works. https://corporatefinanceinstitute.com/resources/knowledge/accounting/accrued-liability/ https://corporatefinanceinstitute.com/resources/knowledge/ac...

The_Beta 5y ago

This is standard accounting principles. GAAP/IFRS accounting require you to do this. It's not malicious

intricatedetail 5y ago

If penalty can be labelled as a cost of doing business, is it really a penalty?