Company Name: Johnson & Johnson.
Public Availability Date: January 30, 2004Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
STAFF REPLY LETTER [INQUIRY LETTER]
December 18, 2003 VIA FEDERAL EXPRESS
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Johnson & Johnson Shareholder Proposal of Joan Lewis Securities Exchange Act
of 1934Rule 14a-8 Ladies and Gentlemen:
This letter is to inform you that it is the intention of Johnson & Johnson, a
New Jersey corporation (the "Company"), to omit from its proxy statement and
form of proxy for its 2004 Annual Meeting of Shareholders (collectively, the
"2004 Proxy Materials") a shareholder proposal and statement in support thereof
(collectively, the "Proposal") received from Joan Lewis (the "Proponent")
relating to animal testing. The Proponent's letter, dated November 28, 2003,
setting forth the Proposal, is attached hereto as Exhibit A.
The Company respectfully requests that the staff of the Division of Corporation
Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission") concur in our view that the Proposal may be excluded from the 2004
Proxy Materials on the grounds set forth below. In the alternative, the Company
requests that the Staff require the Proponent to revise the Proposal in order to
comply with the proxy rules. Pursuant to Rule 14a-8(j) under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), enclosed are six (6) copies of this letter and its
attachments. Also in accordance with Rule 14a-8(j), a copy of this letter and
its attachments are being mailed on this date to the Proponent, informing her of
the Company's intention to omit the Proposal from the 2004 Proxy Materials.
The Company expects to file its definitive 2004 Proxy Materials with the
Commission on or after March 10, 2004. Accordingly, pursuant to Rule 14a-8(j),
this letter is being submitted not less than 80 calendar days before the Company
expects to file its definitive 2004 Proxy Materials with the Commission. In
order to allow the Company to complete its mailing of the 2004 Proxy Materials
in a timely fashion, we would appreciate receiving your response as soon as
practicable. The Company is requesting that the Proposal be excluded from the proxy statement
for the reasons cited below: 1. The substance of the Proposal has already been implemented. Rule 14a-8(i)(10)
provides that a proposal may be excluded if the company has substantially
implemented the proposal.
The Company has already committed to using non-animal tests wherever those
tests have proven reliable enough to assure the safety of the Company's
products, which include cosmetics, pharmaceutical products and medical devices.
Where there are no adequately reliable non-animal tests currently available,
the Company is at the forefront of funding and developing alternative non-animal
tests.
Until such alternative non-animal tests are developed, the Company has a
policy against inflicting any unnecessary pain on animals and uses analgesics,
anesthetics and tranquilizers wherever possible. In fact, mistreatment of
animals or failure to abide by the Company's policies on the humane treatment of
animals is grounds for dismissal of the Company's employees.
The Company continues to spend over $37 million each year using and developing
non-animal tests and will continue to substitute non-animal tests for animal
tests as reliable systems are developed and accepted by the applicable
regulatory authorities. 2. The Proposal contains statements that are materially false or misleading and
Rule 14a-8(i)(3) states that a proposal may be excluded if it contains
materially false or misleading statements. 3. The Proposal, if implemented, would cause the Company to violate the law. In
addition, the Company lacks the power or authority to implement the Proposal.
Rule 14a-8(i)(2) indicates that a proposal may be excluded if, upon
implementation, it would cause a company to violate the law. Rule 14a-8(i)(6)
states that a proposal may be excluded if a company lacks the power or authority
to implement it. In the alternative, we believe that the Proposal should be revised substantially
in order to comply with the Commission's proxy rules. I. Substantially ImplementedRule 14a-8(i)(10)
The Company believes that the Proposal may properly be excluded from its 2004
Proxy Materials pursuant to Rule 14a-8(i)(10) because the Company has already
substantially implemented it. The Proponent urges the Company to use alternative testing methods for five
specific conditions: 1) skin corrosion, 2) skin irritation, 3) skin absorption,
4) phototoxicity and 5) pyrogenicity. Testing for skin corrosion does not apply
to our businesses. Skin corrosion could arise in connection with products like
detergents and household cleaners - products that the Company does not market or
sell. Skin irritation and absorption testing is already conducted by the Company
using a variety of commercially available, validated in vitro alternatives such
as the Epi-Derm skin equivalent method advocated by the Proponent, as well as
the Franz-cell system and the trans-epithelial permeability assay. Phototoxicity
testing is performed using the in vitro alternative neutral red uptake, when
necessary. Pyrogenicity testing is also accomplished using an in vitro
alternative - the limulus amebocyte lysate test. The Proponent also requests that the Company "generally commit to elimination of
product testing on animals in favor of validated in vitro alternatives." The
Company has already publicly committed itself to substituting alternative
non-animal testing in place of live animal testing wherever possible. See
Exhibit B; Exhibit C; and Industry Charter in Support of Global Alternatives to
Animal Testing (available at www.colipa.com/alternatives). In the limited areas
in which there currently are no non-animal tests that are reliable enough to
assure the safety of the Company's products for its customers, the Company is
working actively and funding the work of a number of organizations to develop
adequate non-animal tests. In fact, the Company's cumulative total spending is
more than $37 million each year for using and developing non-animal tests.
The Proponent also asks that the Company "request that relevant regulatory
agencies accept validated in vitro tests as replacements for animal tests." The
Company has already committed itself to "[p]roactively support European and
international initiatives to develop alternative testing methods and promote
their use around the world." See Industry Charter in Support of Global
Alternatives to Animal Testing, Article 6. The Company is also at the forefront
in the U.S. and internationally of developing non-animal testing methods.
The Company acknowledges that the Staff did not permit American Home Products ("AHP")
to exclude an animal testing proposal even though AHP argued that it had
substantially implemented the proposal's substance because it already was
minimizing the use of animal testing not required by law and reducing the impact
of testing on animals. See American Home Products Corporation (February 25,
1993). The Proposal is distinguishable from the AHP proposal, however, because
the Proposal is narrower in focus, relating specifically to tests for skin
corrosion, skin absorption, skin irritation, phototoxicity and pyrogenicity. As
a result, the Company believes that it has already substantially implemented the
Proposal in these areas. II. Materially False or MisleadingRule 14a-8(i)(3)
The Company believes that the Proposal should be excluded from the Company's
2004 Proxy Materials because it contains a number of materially false or
misleading statements such that the Proposal would require detailed and
extensive editing in order to bring it into compliance with the proxy rules. In
the alternative, the Company respectfully requests that the Staff require the
Proponent to revise the Proposal to remove any materially false or misleading
statements. Rule 14a-8(i)(3) permits a company to exclude a shareholder proposal from its
proxy materials if the proposal is materially false or misleading. The Staff has
commented, "when a proposal and supporting statement will require detailed and
extensive editing in order to bring them into compliance with the proxy rules"
because the proposal contains so many materially false or misleading statements,
"we may find it appropriate for companies to exclude the entire proposal,
supporting statement, or both, as materially false or misleading." See Staff
Legal Bulletin No. 14 (July 13, 2001). The Staff has permitted companies in the past to exclude portions of proposals
relating to animal testing on the grounds that they were materially false or
misleading. See, e.g., McDonald's Corporation (March 20, 2002) (permitting the
company to exclude portions of a shareholder proposal that the board issue a
report to shareholders reviewing the company's animal welfare standards because
those portions were materially false or misleading); The Gillette Company
(January 4, 1996) (permitting the company to exclude portions of a shareholder
proposal that the company provide a report on its efforts to eliminate all
animal testing because those portions were materially false or misleading);
American Home Products Corporation (February 25, 1993) (permitting the company
to exclude portions of a shareholder proposal that the company eliminate animal
testing because those portions were materially false or misleading); PepsiCo.,
Inc. (March 9, 1990) (permitting the company to exclude portions of a
shareholder proposal that the company establish a committee to investigate the
effects of factory farming of animals whose meat is used in the company's
products and make recommendations on how the company can encourage the
development of more humane farming techniques because those portions were
materially false or misleading); Avon Products, Inc. (March 30, 1988)
(permitting the company to exclude portions of a shareholder proposal that the
company make certain disclosures concerning animal testing because those
portions were materially false or misleading). The Proposal contains a number of statements that are materially false or could
mislead shareholders. In the introduction, the Proponent argues for in vitro
tests "as an alternative to ... unnecessary animal testing." The Company does
not use any unnecessary animal tests. In fact, the Company is at the forefront
of phasing out animal testing where it is not required by law and not necessary
to assure the safety of the Company's products. Although in vitro systems have
contributed to reducing animal use in product testing, they cannot at this time
obviate the need entirely for animal studies. Testing in animals is required to
understand thecomplex interactions between the body's organ systems and the
physiological and pathological consequences of exposure to drugs, chemicals and
medical devices. Both U.S. and foreign regulators require a certain amount of
animal testing in order to protect consumers. See, e.g., 21 C.F.R. Section
312.23(a)(8)(i) (providing that a company must include in an application to the
U.S. Food and Drug Administration for authorization to conduct a clinical trial
of an Investigational New Drug Application in humans "a section describing the
pharmacological effects and mechanism(s) of action of the drug in animals, and
information on the absorption, distribution, metabolism, and excretion of the
drug, if known"); European Federation of Pharmaceutical Industries and
Associations, Policy Statement on the Use of Animals in Research and Development
("[A]ll countries which regulate the approval of new medicines demand evidence
from animal studies before they will allow the medicines ... to be tested and
used in patients.") When American Home Products received a shareholder proposal that the company
eliminate animal testing, the company argued, among other things, that the
portion of the proposal claiming that animal testing is an "unnecessary expense"
was excludable as false or misleading. The Staff agreed with the company and
required the proponent to revise the proposal to delete the reference. See
American Home Products Corporation (February 25, 1993). In light of the Staff's
determination in response to the request for a no-action letter from American
Home Products, the Company believes that the Proponent's characterization of
animal testing as "unnecessary" should be omitted from the Company's 2004 Proxy
Materials The Proposal also misleadingly suggests that the Company conducts tests on
animals for skin corrosion, irritation, absorption, phototoxicity and
pyrogenicity, as follows:
"Testing for skin corrosion, irritation, absorption, phototoxicity, and
pyrogenicity on animals is no longer necessary, and can be tested using
non-animal methods."
"Testing for skin corrosion can be accomplished using skin equivalent tests
such as EpiDerm and EpiSkin."
"Chemical absorption through the skin can be determined using isolated human
skin tissue instead of applying substances to the skin of living animals."
"Once a chemical has been determined to be non-corrosive, its potential to
cause mild irritation can be tested using a clinical skin patch test."
"Phototoxicity, an inflammatory reaction caused by interaction of a chemical
with sunlight, can be evaluated using 3T3 Neutral Red Uptake ("NRU") test."
"Pyrogenicity, the inflammatory reaction and fever that can occur when
intravenous drugs and pharmaceuticals interact with the immune system can be
evaluated using blood from healthy human donors.... The in vitro pyrogen test
validated in Europe is a total replacement for the rabbit test. The in vitro
test [for pyrogenicity] is more accurate, and results more quickly attainable."
Testing for skin corrosion does not apply to our businesses. Skin corrosion
could arise in connection with products like detergents and household cleaners -
products that the Company does not market or sell. Skin irritation and
absorption testing is already conducted by the Company using a variety of
commercially available, validated in vitro alternatives, such as the Epi-Derm
skin equivalent method advocated by the Proponent, as well as the Franz-cell
system and the trans-epithelial permeability assay. Phototoxicity testing is
performed using the in vitro alternative neutral red uptake, when necessary.
Pyrogenicity testing is also accomplished using an in vitro alternative - the
limulus amebocyte lysate test. Since the Company is already using alternative
tests for each of these conditions, it is misleading to shareholders to suggest
that there are alternative tests available that the Company is not already
using. The Proposal also contains various false or misleading claims about the current
state of foreign laws relating to animal testing.
"Canada, the European Union, and most countries in the Organization for
Economic Cooperation and Development (OECD) accept the in vitro tests as total
replacements for animal tests."
"This in vitro approach is accepted as an OECD Test Guideline, and is the
default approach for skin absorption testing in several European nations."
"This test is accepted by Regulators in Canada as a valid replacement for
animal based skin irritation testing."
"The NRU test is accepted throughout Europe and by the OECD as the official
test guideline for phototoxicity."
"The in vitro pyrogen test validated in Europe is a total replacement for the
rabbit test." The Company acknowledges that the European Union has validated three alternative
test methods: 1) the EPISKINTM test for skin corrosion, 2) the Transcutaneous
Electrical Resistance Assay (TER) for chemical absorption and 3) the 3T3 Mouse
Fibroblast Neutral Red Uptake Phototoxicity (NRU-PT) for phototoxicity. Since
the European Union validated these alternative test methods, the Company has not
used animal testing in Europe to evaluate the safety of these parameters of its
finished cosmetic products. The Company hasrelied on existing data, historic
databases, information from suppliers, computer systems and in vitro tests.
However, European regulators still require companies to conduct certain amounts
of animal testing. See European Federation of Pharmaceutical Industries and
Associations, Policy Statement on the Use of Animals in Research and Development
("[A]ll countries which regulate the approval of new medicines demand evidence
from animal studies before they will allow the medicines ... to be tested and
used in patients.") Where the Company is still currently required to conduct
animal testing, the Company has committed itself publicly to work to develop
additional non-animal testing methods. See Industry Charter in Support of Global
Alternatives to Animal Testing. Alternative tests are not accepted as total replacements for animal tests in
Canada either, as the Proponent claims. In determining whether companies are
required to conduct animal testing on products marketed and sold in Canada,
Health Canada, the relevant regulatory agency, is guided by the International
Conference on Harmonization (ICH) guidelines. The ICH guidelines require
companies to conduct a certain amount of animal testing, such as testing for the
systemic toxicity of a product. The Company acknowledges that Health Canada has
expressed general support for alternative testing methods, but has not adopted
regulations that formally validate alternative testing methods for all of the
Company's products. When Gillette received a shareholder proposal that the company provide a report
on its efforts to eliminate animal testing, Gillette argued that the proposal
was excludable as false or misleading because it suggested that Gillette would
be required to eliminate animal testing or cease exports to Europe pursuant to a
directive of the European Community Council of Ministers. Gillette noted that
the directive contained an exception to the ban where adequate non-animal test
methods have not been developed yet for a particular product. The Staff required
the proponent to revise the proposal to discuss the exception to the directive.
See The Gillette Company (January 4, 1996). Similarly, the Proposal
mischaracterizes the state of European and Canadian law on animal testing. As a
result, the Company believes that the statements contained in the Proposal about
European and Canadian law are excludable as materially false or misleading.
The Proposal also asks the Company to "request that relevant regulatory agencies
accept validated in vitro tests as replacements for animal tests." The Proposal
misleads shareholders by suggesting that the relevant regulatory agencies do not
already accept certain validated in vitro tests as replacements for animal
tests. In fact, regulatory agencies in the U.S. and internationally have already
accepted a number of validated in vitro tests as replacements for animal tests.
For example, in February 2000, the European Commission formally accepted three
alternative testing methods: 1) the EPISKINTM test for skin corrosion, 2) the
Transcutaneous Electrical Resistance Assay (TER) for chemical absorption and 3)
the 3T3 Mouse Fibroblast Neutral Red Uptake Phototoxicity (NRU-PT) for
phototoxicity. In the U.S., the Food and Drug Administration has validated the
limulus amebocyte lysate test used by the Company to test forpyrogenicity of
certain products. Accordingly, the Company currently uses these alternative
methods. As a result of these and other regulations that permit our Company to
use certain non-animal tests, our affiliates around the world currently use more
than 160 different alternative tests in research. Furthermore, the Proposal misleads shareholders by suggesting that the Company
is not already taking steps to encourage regulators to validate additional
alternative testing methods. The Company joined in an Industry Charter in
Support of Global Alternatives to Animal Testing in Europe and committed itself
to, "[p]roactively support European and international initiatives to develop
alternative testing methods and promote their use around the world." See
Industry Charter in Support of Global Alternatives to Animal Testing. Where
there are no currently validated in vitro tests for product safety, the Company
is at the forefront of developing and funding the development of replacements
for live animal testing. For example, we are a corporate sponsor of the Johns
Hopkins Center for Alternatives to Animal Testing and the Institute for In Vitro
Sciences. In total, we spend more than $37 million each year using and
developing non-animal tests. The Proposal also incorrectly suggests that animal testing is always "painful"
to the animals. The Company has consistently committed itself publicly to
developing procedures that limit the potential for discomfort to the animals.
See Exhibit B and Industry Charter in Support of Global Alternatives to Animal
Testing. In the Company's Policy on the Humane Care & Use of Laboratory Research
Animals, the Company commits that, "[n]o laboratory animal shall be subjected to
unnecessary pain and/or distress. Where pain and/or distress are unavoidable,
appropriate analgesics, anesthetics and tranquilizers shall be used." See
Exhibit C. Failure by the Company employees to abide by this policy is grounds
for dismissal. Id. The Company acknowledges that the Staff did not permit Greyhound to exclude the
statement "some tests cause pain" from an animal testing proposal it had
received on the grounds that the statement was materially false or misleading.
See The Greyhound Corporation (March 24, 1987). The Proposal, however, is
distinguishable from the Greyhound proposal because the Greyhound proponent
submitted reports filed by Greyhound with the United States Department of
Agriculture showing that in the two prior years Greyhound had used several
species of animals in acute toxicity and other testing involving pain or
distress without the administration of appropriate anesthetic, analgesic or
tranquilizer drugs. In contrast, the Company has a policy that "[n]o laboratory
animal shall be subjected to unnecessary pain and/or distress. Where pain and/or
distress are unavoidable, appropriate analgesics, anesthetics and tranquilizers
shall be used." See Exhibit C. As a result, the Company believes that the
Proposal's suggestion that all animal testing is "painful" should be omitted
from the Proposal. In addition, the Proposal misleadingly claims that non-animal test methods are
necessarily "reliable." The Company has substituted non-animal test methods for
live animal testing wherever those methods have been proven reliable and have
been permitted by regulatory authorities and will continue to do so as new tests
are developed. Unfortunately, there currentlydo not exist sufficiently reliable
non-animal test methods that can be used to assure the safety of all of the
Company's products. The Proposal misleads shareholders by suggesting that there
are reliable non-animal test methods currently available to the Company that the
Company is choosing not to use. Furthermore, the Proposal falsely claims that non-animal tests are "often faster
and more economical." This statement is not supported. Nonetheless, the Company
remains committed to substituting alternative non-animal systems in place of
live animal testing, even if these methods are slower and more costly to the
Company because the Company is committed to a policy of humane treatment of
animals. In fact, the Company spends more than $37 million each year using and
developing non-animal tests. When Avon challenged a shareholder proposal that the company make certain
disclosures about animal testing by arguing that the proposal contained a number
of false or misleading statements, including allegations that animal tests are
more costly, the Staff determined that such allegations were excludable absent
revision by the shareholder to characterize the allegations as an opinion. See
Avon Products, Inc. (March 30, 1988). As a result, the Company believes that the
Proponent's claim that non-animal testing is "more economical" should be
excluded from the Company's 2004 Proxy Materials or, at the least, the Proponent
should be required to recast the claim as an opinion. The Proposal states, "[i]t is in the Company's best interest that it commit to
utlizing [sic] validated in vitro methods of testing as a humane alternative to
unnecessary animal tests." The Company already uses alternative non-animal test
methods where those methods have proven adequate to sufficiently assure product
safety and been approved for use by applicable regulatory authorities. The
Company is committed to substituting non-animal test methods for live animal
systems in the future if possible, but it is not in the best interest of the
Company to use in vitro methods where those methods may not serve to adequately
ensure the safety of the Company's products and customers or may constitute a
violation of the Company's legal obligations. As discussed above, the Proposal contains many false or misleading statements
and it would require substantial revision in order to be in compliance with Rule
14a-8(i)(3). As a result, the Company believes that the Proposal should be
excluded from its 2004 Proxy Materials in its entirety. The Staff has made clear
that "when a proposal and supporting statement will require detailed and
extensive editing in order to bring them into compliance with the proxy rules,
we may find it appropriate for companies to exclude the entire proposal,
supporting statement, or both, as materially false or misleading." See Staff
Legal Bulletin No. 14 (July 13, 2001). In the alternative, the Company requests
the Staff to require the Proponent to revise the Proposal to remove all
materially false or misleading statements. III. Violation of the LawRule 14a-8(i)(2) and Lack of Authority or PowerRule
14a-8(i)(6). The Company believes that the Proposal may be excluded from the Company's 2004
Proxy Materials because, if implemented, it would result in a violation of the
law pursuant to Rule 14a-8(i)(2) and because the Company lacks the power and
authority to implement the Proposal pursuant to Rule 14a-8(i)(6).
The Staff has often considered the application of these rules to a particular
shareholder proposal in tandem. See, e.g., The Greyhound Corporation (March 24,
1987) (considering in tandem the application of Rule 14a-8(i)(2) and Rule
14a-8(i)(6) to a shareholder proposal on animal testing). The Proposal requests that the Company commit to "elimination of product testing
on animals in favor of validated in vitro alternatives" and to "commit to use in
vitro tests for assessing skin corrosion, skin absorption, skin irritation,
phototoxicity and pyrogenicity." The Company is required under U.S. and foreign
laws to conduct a limited amount of animal testing to assure the safety of its
products, which include pharmaceuticals and medical devices, prior to their
marketing and sale. If the Company eliminated all animal testing, as the
Proposal requests, the Company would be in violation of the law.
In the United States, the Company is required to test new ingredients in or new
formulations of pharmaceutical products for safety in animals prior to final
validation in human tests. See 21 C.F.R. Section 312.23(a)(8)(i) (providing that
a company must include in an application to the U.S. Food and Drug
Administration for authorization to conduct a clinical trial of an
Investigational New Drug Application in humans "a section describing the
pharmacological effects and mechanism(s) of action of the drug in animals, and
information on the absorption, distribution, metabolism, and excretion of the
drug, if known"). In The European Union, European regulators require "evidence from animal studies
before they will allow the medicines ... to be tested and used in patients." See
European Federation of Pharmaceutical Industries and Associations, Policy
Statement on the Use of Animals in Research and Development.
Canadian regulators are guided by the International Conference on Harmonization
(ICH) guidelines. The ICH guidelines require companies to conduct a certain
amount of animal testing, such as testing for the systemic toxicity of a
product. The Company acknowledges that the Staff did not permit Greyhound Corporation to
exclude an animal testing proposal even though Greyhound argued that the
proposal was excludable because the company was required to conduct animal
testing by law and implementing the proposal would cause the company to violate
the law. See The Greyhound Corporation (March 24, 1987). However, the Proposal
is distinguishable from the Greyhoundproposal because the Greyhound proposal, if
approved, would only have committed Greyhound to eliminate animal testing not
required by law. With respect to animal testing required by law, Greyhound would
only have been committed to make disclosures and phase-out product lines.
In contrast, the Proposal, if approved, would commit the Company to cease animal
testing in the development of products that the Company is required to test on
animals prior to the marketing and sale of those products.
As a result, the Company believes that the Proposal may be excluded from its
2004 Proxy Materials because the Company would be forced to violate the law if
the Proposal were implemented. *** For the foregoing reasons, we respectfully request that the Staff concur in our
opinion that the Proposal may be properly omitted from the 2004 Proxy Materials.
If you have any questions with respect to the foregoing or if you need any
additional information, please feel free to give me a call at Johnson & Johnson
at (732) 524-3570. If for any reason the Staff does not agree with the
conclusions expressed herein, we would appreciate an opportunity to confer with
the Staff before issuance of its response. We request that you acknowledge receipt of this letter and the enclosures by
stamping and returning the enclosed additional copy of the cover page of this
letter using the enclosed self-addressed stamped envelope.
Thank you for your prompt attention to this matter.
Very truly yours, /s/
Thomas J. Spellman III
Assistant Corporate Secretary and Senior Counsel TJS/dr
Enclosures cc: Joan Lewis, Esq.
3473 Mandeville Canyon Road
Los Angeles, California 90049 [APPENDIX 1]
SHAREHOLDERS' RESOLUTION This Proposal is submitted by Joan Lewis, owner of 200 shares of stock.
It relates to availability of validated in vitro tests for assessing dermal and
pyrogenic affects, as an alternative to painful and unnecessary animal testing.
Johnson & Johnson ("J&J" or "the Company") should commit to utilizing validated
in vitro tests in place of live animal assays whenever possible.
RESOLVED, the shareholders of J&J request that the Board:
1. Commit to use in vitro tests for assessing skin corrosion, skin absorption,
skin irritation, phototoxicity and pyrogenicity, and generally commit to
elimination of product testing on animals in favor of validated in vitro
alternatives; 2. Request that relevant regulatory agencies accept validated in vitro tests as
replacements for animal tests; and 3. Form a Shareholders Advisory Committee to counsel the Board on these issues
and report annually to shareholders on the Company's progress.
Supporting Statement: J&J has a responsibility to use non-animal test methods,
because they are reliable, often faster and more economical, and more humane.
Testing for skin corrosion, irritation, absorption, phototoxicity, and
pyrogenicity on animals is no longer necessary, and can be tested using
non-animal methods. Testing for skin corrosion can be accomplished using skin equivalent tests such
as EpiDermTM and EpiSkinTM. In the animal test, rabbits are locked into full
body restraints and the chemical applied to shaved skin for several hours.
Canada, the European Union, and most countries in the Organization forEconomic
Cooperation and Development (OECD) accept the in vitro tests as total
replacements for animal tests. Chemical absorption through the skin can be determined using isolated human skin
tissue instead of applying substances to the skin of living animals. This in
vitro approach is accepted as an OECD Test Guideline, and is the default
approach for skin absorption testing in several European nations.
Once a chemical has been determined to be non-corrosive, its potential to cause
mild irritation can be tested using a clinical skin patch test. This test is
accepted by Regulators in Canada as a valid replacement for animal based skin
irritation testing. Phototoxicity, an inflammatory reaction caused by interaction of a chemical with
sunlight, can be evaluated using 3T3 Neutral Red Uptake ("NRU") test. The animal
based test involves applying different concentrations of a chemical on the
shaved skin of guinea pigs, and exposing half of the animals to ultraviolet
radiation for at least two hours. The NRU test is accepted throughout Europe and
by the OECD as the official test guideline for phototoxicity.
Pyrogenicity, the inflammatory reaction and fever that can occur when
intravenous drugs and pharmaceuticals interact with the immune system can be
evaluated using blood from healthy human donors. The animal test consists of
locking rabbits in full-body restraints, injecting test substances into their
blood stream, and monitoring temperature. The in vitro pyrogen test validated in
Europe is a total replacement for the rabbit test. The in vitro test is more
accurate, and results more quickly attainable. It is in the Company's best interest that it commit to utlizing validated in
vitro methods of testing as a humane alternative to unnecessary animal tests.
[APPENDIX 2]
Exhibit A November 28, 2003 BY REGULAR MAIL
Mr. Michael H. Ullmann
Secretary, Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933 Re: Shareholder Resolution for Inclusion in the 2004 Proxy Statement
Dear Mr. Ullmann: I am in receipt of your letter dated November 19th and am responding
accordingly. Attached to this letter is a revised Shareholder Proposal submitted for
inclusion in the proxy statement for the 2004 annual meeting. The revised
Proposal complies with the Section 14a-8(d) limitation on length and is
submitted within the time frame required by Rule 141-8(f)(1).
Thank you for your consideration.
Very truly yours, /s/
Joan Lewis Enclosure [INQUIRY LETTER]
January 5, 2004 Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth St. NW
Washington, DC 20549 Re: Johnson & Johnson Shareholder Proposal of Joan Lewis Securities Exchange Act
of 1934Rule 14a-8 Ladies and Gentlemen:
This letter is being submitted pursuant to the rules of the Securities and
Exchange Act of 1934 (the "Exchange Act") in response to a letter from Johnson &
Johnson ("J&J" or the "Company") dated December 18, 2003, to omit from its proxy
statement and form of proxy for its 2004 Annual Meeting of Shareholders
(collectively, the "2004 Proxy Materials") a shareholder proposal and statement
in support thereof (collectively, the "Proposal") I submitted on November 28,
2003. The Company's request that the Proposal be excluded from its 2004 Proxy
Materials is based on the following three (3) assertions: 1. That "[t]he substance of the Proposal has already been implemented."
2. That "[t]he Proposal contains statements that are materially false or
misleading..." 3. That "[t]he Proposal, if implemented, would cause the Company to violate the
law. In addition, the Company lacks the power or authority to implement the
Proposal." For the reasons outlined below, I submit that none of these assertions is
correct or valid and respectfully request that the staff of the SEC's Division
of Corporation Finance refrain from issuing a no enforcement action letter.
1. Substantially ImplementedRule 14a-8(i)(10)
In a letter dated December 10, 2003 (attached hereto as Exhibit A), J&J notes
that its product line includes "not only certain cosmetics and toiletry
products, but also medical devices and pharmaceutical products" (p. 2). Thus, in
order for the Company to assert that the substance of the Proposal has been
implemented, it must be able to demonstrate each of the following:
1. Its use of "in vitro tests for assessing skin corrosion, skin absorption,
skin irritation, phototoxicity and pyrogenicity," when and where applicable, for
not only cosmetics and toiletry products, but also pharmaceuticals and medical
devices, together with a general commitment to the "elimination of product
testing on animals in favor of validated in vitro alternatives."
The Company's December 10 letter states that "Johnson & Johnson companies do
not test cosmetics and toiletry products on animals" (p. 1) and that "[w]ith
regard to the five specific conditions you reference in your proposal, we can
assure you that we use only in vitro, or alternative, methods of testing in
cosmetics and toiletry products, as applicable" (p. 1, emphasis supplied). Both
of these statements are carefully qualified so as to clearly limit their scope
to the testing of cosmetics and toiletry products. No similar claim is made as
to the Company's implementation of Point 1 of the Proposal with respect to the
testing of pharmaceuticals or medical devices.
The Company's December 18 letter asserts that J&J "has already committed to
using non-animal tests wherever those tests have proven reliable enough to
assure the safety of the Company's products, which include cosmetics,
pharmaceutical products and medical devices" (pp. 2, 9). However, the Company
again stops short of stating which, if any, of the non-animal tests outlined in
the Proposal are currently being used in the context of safety testing of
pharmaceuticals and medical devices. Similarly, on page 6 of its December 18
letter, the Company reports that it "has not used animal testing in Europe to
evaluate [skin corrosion, absorption and phototoxicity] of its finished cosmetic
products" (p. 6), which suggests that the same may not be true (i) outside of
Europe, (ii) for the raw ingredients that comprise "finished cosmetic products,"
or (iii) for toiletry, pharmaceutical, or other products manufactured by J&J.
The Company's extensive use of caveats and qualifiers in this area suggests that
its implementation of Point 1 of the Proposal may fall well short of being
"substantial" in all instancesand particularly in the area of pharmaceuticals
and medical devices.
The Company's activities in the area of funding the development and validation
of non-animal test methods are commendable; however, they are separate and
distinct from the Company's use of non-animal methods for the five specific
endpoints in question for the safety testing of all of its product classes,
which is the focus of Point1 in the Proposal.
The Company's statement that "[t]esting for skin corrosion does not apply to
our businesses" (pp. 3, 6) is not entirely accurate. Chemically induced skin
damage exists along a spectrum ranging from irreversible tissue destruction
(corrosion) to milder and reversible reactions (irritation). Thus, these terms
connote a difference in degree, not kind. Although the Company is correct that
an assessment of skin corrosion is not a specific regulatory requirement for the
classes of products it markets, it nonetheless reports using "the EpiDerm skin
equivalent method" an internationally accepted non-animal test for skin
corrosionas part of its overall testing strategy for skin irritation. I support
this action wholeheartedly, and seek only to ensure that the Company makes full
use of these promising non-animal methods in the safety testing of all its
product classes. 2. "Hands on" advocacy to "request that relevant regulatory agencies accept
validated in vitro tests as replacements for animal tests."
Unlike the highly specific and prescriptive toxicity testing requirements that
exist for pesticides and certain other types of chemicals, the pre-clinical
safety testing of pharmaceuticals and medical devices tends to be a more
flexible and interactive process, involving extensive dialogue and negotiations
between a product manufacturer and relevant regulatory bodies. This process
affords companies like J&J an excellent opportunity to "request that relevant
regulatory agencies accept validated in vitro tests as replacements for animal
tests," as the Proposal suggests. Thus, neither the Company's provision of
research funding nor its involvement with contract testing facilities (i.e.,
Institute for In Vitro Sciences) or academic centers (i.e., Johns Hopkins
University Center for Alternatives to Animal Testing) is a substitute for the
kind of direct and active liaison with regulatory agencies in the U.S. and
abroad that is needed to persuade these agencies to become more accepting of
validated non-animal test methods such as those outlined in the Proposal (most
of which have not been widely accepted by U.S. agencies). 3. Establishment of "a Shareholders Advisory Committee to counsel the Board on
these issues and report annually to shareholders on the Company's progress."
The Company did not address this point in its December 18 filing, which
suggests that this aspect of the Proposal has also not been substantially
implemented. 2. Materially False or MisleadingRule 14a-8(i)(3)
In its December 18 letter, the Company takes exception to some of the
terminology and examples included in the Proposal, arguing that they are
materially false or misleading. At the outset, it should be noted that virtually
all the examples cited by the Company remove statements from the carefully
constructed context of the Proposal, recombining them in such a way as to make
them appear quite misleading. I will address each of the Company's examples in
turn: 1. "Unnecessary" animal testing (p. 4).
In the context of the Proposal, "unnecessary" animal testing is carefully
qualified as referring to testing on animals that could otherwise be conducted
using scientifically validated non-animal methods. This narrow context is
clearly established at the very outset in the proposal, with the second sentence
reading: "It relates to the availability of validated in vitro tests for
assessing dermal and pyrogenic effects as an alternative to painful and
unnecessary animal testing." Thus, while it is regrettable that the 500-word
limit for shareholder resolutions does not permit every term to be defined for
absolute clarity, I respectfully submit that there is little room for ambiguity
or misinterpretation of the term "unnecessary animal testing" in this instance,
given the highly specific nature of the Proposal and my careful use of
qualifiers.
As explained above, animal testing is rightly characterized as unnecessary
where validated in vitro or other non-animal methods exist. Thus, the latter
part of Point 1 in the Proposalthat the Company "... generally commit to
elimination of product testing on animals in favor of validated in vitro
alternatives" merely reinforces in the form of a resolution the intent that was
clearly articulated in the third sentence of the Proposalthat the Company
"should commit to utilizing validated in vitro tests in place of live animal
assays wherever possible" (emphasis supplied). The Proposal does not request
that J&J abandon animal testing where validated non-animal methods do not yet
exist, nor does it call on the Company to violate its obligation to assure the
safety of its products or to comply with applicable statutes and regulations. In
my ongoing dialogue with the Company, I have offered to amend Point 1 of the
Proposal in order to eliminate any possible ambiguity or misinterpretation. The
amended Proposal is attached hereto as Exhibit B. Also attached as Exhibit C is
my letter to J&J further attempting to clarify the focus and accommodate the
Company's concerns. 2. "The Proposal also misleadingly suggests that the Company conducts tests on
animals for skin corrosion, irritation, absorption, phototoxicity and
pyrogenicity..." (p. 5).
Based on an understanding of international pre-clinical testing requirements
for the types of products manufactured by the Company, there could be little
doubt that J&Jperforms some manner of testing for the five specific endpoints
addressed in the Proposal. Indeed, the Company's December 18 letter to the SEC
clearly acknowledges that J&J conducts testing for skin irritation, absorption,
phototoxicity and pyrogenicity. And despite the Company's insistence that
"[t]esting for skin corrosion does not apply to our business" (pp. 3, 6), it
does acknowledge using the EpiDermTM and EpiSkinTM skin corrosion assays as part
of its overall testing strategy for skin irritation. The Company's desire to
argue semantics on this point does not minimize the strict accuracy of the
Proposal, let alone render it false or misleading.
I am also perplexed by the Company's extraction of six statements from the
Proposal as evidence in support of its assertion as cited above. The excerpts
chosen are all statements of fact, the majority of which describe specific
toxicity endpoints and/or validated non-animal test methods. As explained above,
there could be little doubt that J&J performs some manner of testing for the
five specific endpoints addressed in the Proposal; however, the Proposal does
not allege or imply that the Company necessarily performs animal-based testing
for all of these endpoints. 3. "[I]t is misleading to shareholders to suggest that there are alternative
tests available that the Company is not already using" (p. 6).
The Company's December 18 letter states: "Pyrogenicity testing is also
accomplished using an in vitro alternativethe limulus amebocyte lysate test"
(p. 3). This test uses the blood of horseshoe crabs (who may or may not be
killed over the course of their use as blood "donors") to test for fever-causing
agents. While this test can be seen as a positive "refinement" relative to the
still-common rabbit fever test, the Company fails to acknowledge the further
ethical and scientific advances that could be made by switching to a test using
blood from human volunteers, as advocated in the Proposal. On the basis of J&J's
position on this matter, there are indeed "alternative tests available that the
Company is not already using." 4. "The Proposal also contains various false or misleading claims about the
current state of foreign laws relating to animal testing."
All statements in the Proposal concerning international acceptance of specific
non-animal test methods are thoroughly accurate and supportable; however, the
manner in which various statements are cited on page 6 of J&J's December 18
letter is highly suspect. Not only does J&J remove these five statements from
the narrow and specific context in which they appeared in the Proposal, the
Company then proceeds to interpret their meaning quite out of context,
presenting its glaring misinterpretation to the SEC as "evidence" in support of
its "false or misleading" claim. For example, it is clear in the Proposal that the statement, "Canada, the
European Union, and most countries in the Organization for Economic Cooperation
and Development (OECD) accept the in vitro tests as total replacements for
animal tests," is limited to "skin equivalent methods such as EpiDermTM and
EpiSkinTM" for skin corrosivity testing. The Company, however, takes this
statement completely out of context, misrepresenting it to the SEC as a claim on
my part that Europe and Canada have totally eliminated all animal testing. The
same is true of the other statements excerpted by the Companyeach refers to a
single, specific toxicity endpoint, not the entire universe of toxicity testing.
5. "The Proposal misleads shareholders by suggesting that the relevant
regulatory agencies do not already accept certain validated in vitro tests as
replacements for animal tests" (p. 7).
International acceptance of validated non-animal methods is uneven at best for
any non-animal test method, and it would be misleading to suggest otherwise. For
example, international agreement has been reached through the 30-member country
OECD that the use of animals in the assessment of skin corrosion can be fully
replaced by a weight-of-evidence determination using non-animal methods (now
codified in OECD Test Guideline 431). The OECD's policy on Mutual Acceptance of
Data, in turn, provides that "data generated in a Member country in accordance
with OECD Test Guidelines and Principles of Good Laboratory Practice (GLP) shall
be accepted in other Member countries for assessment purposes and other uses
relating to the protection of human health and the environment." Thus, all
member countries of the OECDincluding the U.S.should accept these non-animal
tests for skin corrosion as total replacements for their animal-based
counterparts. The U.S., however, has opted to accept these tests only as
"positive screens" (i.e., negative results in vitro would require confirmation
in an animal test) rather than total replacements, in contrast to the
international consensus. Similar scenarios could be presented for each of the other validated non-animal
tests outlined in the Proposal. 6. "[T]he Proposal misleads shareholders by suggesting that the Company is not
already taking steps to encourage regulators to validate additional alternative
testing methods" (p. 8).
The Proposal does not address the process of validating additional or new
non-animal methods, but regulatory agencies' acceptance of non-animal methods
that have already undergone successful validation. 7. "The Proposal also incorrectly suggests that animal testing is always
`painful' to the animals" (p. 8).
Detailed statistics regarding the use and suffering of animals in U.S.
laboratories are incomplete with regard to the species most commonly used in
toxicity testing. However, statistics published by the Canadian Council on
Animal Care clearly indicate that most animal testing is painful. (Statistics
available upon request.) For example, of the nearly 260,000 animals used in
regulatory toxicity tests in Canada in the year 2000:
22% were subjected to tests that caused "severe pain near, at, or above the
pain tolerance threshold of anaesthetized conscious animals."
36% were subjected to tests that caused "moderate to severe distress or
discomfort."
20% were subjected to tests that caused "minor stress or pain of short
duration."
The Company's reference to its policy that "[n]o laboratory animal shall be
subjected to unnecessary pain and/or distress" (p. 8) further undermines its
contention on this point. Regardless of one's personal belief regarding the
"necessity" of such pain and distress, the fact remains that these conditions
are inextricably linked to animal-based toxicity studies. 8. "[T]he Proposal misleadingly claims that non-animal test methods are
necessarily `reliable'" (p. 8).
Throughout the Proposal, I have made liberal use the term "validated" in
relation to the non-animal test methods I am advocating. As validation is a
rigorous scientific process to evaluate a test's reliability (ability to
generate reproducible results within and between labs over time) and relevance
(ability to correctly measure the biological effect of interest in the species
of interest), a test method that is scientifically valid is also, by definition,
reliable. 9. "[T]he Proposal falsely claims that non-animal tests are `often faster and
more economical'" (p. 9).
There is nothing false or misleading about this statement in the Proposal. The
Handbook of Toxicology (2nd Ed., CRC Press, 2002), documents that almost without
exception, in vitro methods are less costly than their animal-based
equivalent.(Handbook available upon request.) 10. "[I]t is not in the best interest of the Company to use in vitro methods
where those methods may not serve to adequately ensure the safety of the
Company's products and customers or may constitute a violation of the Company's
legal obligations" (p. 9).
The Proposal states: "It is in the Company's best interest that it commit to
utilizing validated in vitro methods of testing as a humane alternative to
unnecessary animal tests" (emphasis supplied). As previously discussed, an
"unnecessary" animal test would be one that could otherwise be conducted using a
scientifically validated non-animal method. Thus, this statement does not call
on the Company to categorically eliminate all animal testing, which could
constitute a violation of its legal obligations. Moreover, given that few
animal-based toxicity tests have ever undergone formal scientific validationor
a level of objective review that even remotely approximates the validation
process for in vitro methodsI am perplexed by the Company's resistance to the
logic that a rigorously validated test produces results that are more relevant,
reliable, and therefore consumer-protective, than those of a non-validated test.
3. Violation of the LawRule 14a-8(i)(2) and Lack of Authority or PowerRule
14a-8(i)(6) As discussed in detail above, the Company's assertion that the Proposal would
cause it to violate the law (p. 10) is alarmist to say the least, and based on a
highly distorted interpretation of selected elements from the Proposal. I am
well aware of U.S., European, and other international regulations and policies
with respect to the submission of some animal-derived pre-clinical safety data
before human clinical trials are authorized to proceed. However, the Proposal
focuses on five specific and narrow health effects, and does not in any way
address the innumerable toxicity endpoints that would be evaluated in animals
(including some non-human primates and dogs) over the course of a standard
pre-clinical safety assessment. Repeated dosing studies of one-, three-, six-,
and 12-month periods, targeted pharmacokinetic studies, assessments of
developmental and reproductive toxicity, cancer, and other serious health
effects would still be carried out on many thousands of living animals. It is
all of these studiesnot the five narrow endpoints targeted in the Proposalthat
clearly fall within the scope of 21 CFR 312.23(a)(8)(i). Moreover, the non-animal test methods described in the Proposal are not the
first such methods to be brought forward to companies and regulatory agencies as
alternatives. For example, the in vitro "Ames test" has been accepted by
regulators in the U.S. and internationally for more than 20 years as the "gold
standard" for testing chemicals for mutagenicity. Since companies in the U.S.
and around the world can and do base assessments of genetic toxicity on Ames
test and other in vitro results without allegations of having violated their
statutory/regulatory obligations, it follows that even where requirements exist
that some animal-based data be provided prior tohuman clinical trials, this does
not in any way mean that all pre-clinical data must be animal-derived.
* * * * * I regret that J&J has chosen not to accept my narrowly-focused and
carefully-worded Proposal in good faith. However, for the foregoing reasons, I
respectfully request that the SEC advise the Company that it will take
enforcement action if J&J fails to include the Proposal in its 2004 Proxy
Materials. Should the SEC not agree with the conclusions expressed herein, I
would appreciate the opportunity to confer with a member of your staff before
issuance of the SEC's response. Please feel free to contact me should you have any questions or require further
information. Sincerely, /s/
Joan Lewis, Esq. Encls.
cc: T. Spellman III, Johnson & Johnson (by fax)
E. Kennedy, Calvert (by fax)
T. Seidle, Scientific Consultant (by fax)
[STAFF REPLY LETTER]
January 30, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: Johnson & Johnson Incoming letter dated December 18, 2003
The proposal requests that the Board commit to use in vitro tests for assessing
skin corrosion, skin absorption, skin irritation, phototoxicity and
pyrogenicity, and generally commit to elimination of product testing on animals
in favor of validated in vitro alternatives. The proposal further requests that
the Board request that relevant regulatory agencies accept validated in vitro
tests as replacements for animal tests and that the Board form a Shareholders
Advisory Committee to counsel the Board on these issues and report annually to
shareholders on the Company's progress. We are unable to concur in your view that Johnson & Johnson may exclude the
proposal under rules 14a-8(i)(2) and 14a-8(i)(6). Accordingly, we do not believe
that Johnson & Johnson may omit the proposal from its proxy materials in
reliance on rules 14a-8(i)(2) and 14a-8(i)(6). We are unable to concur in your view that Johnson & Johnson may exclude the
entire proposal under rule 14a-8(i)(3). There appears to be some basis for your
view, however, that portions of the supporting statement may be materially false
or misleading under rule 14a-9. In our view, the proponent must:
delete the sentence that begins "Canada, the European Union..." and ends "...
total replacements for animal tests"; and
provide factual support in the form of a citation to a specific source for the
statement that non-animal test methods are "often faster and more economical."
Accordingly, unless the proponent provides Johnson & Johnson with a proposal and
supporting statement revised in this manner, within seven calendar days after
receiving this letter, we will not recommend enforcement action to the
Commission if Johnson & Johnson omits only these portions of the proposal and
supporting statement from its proxy materials in reliance on rule 14a-8(i)(3).
We are unable to concur in your view that Johnson & Johnson may exclude the
proposal under rule 14a-8(i)(10). Accordingly, we do not believe that Johnson &
Johnson may omit the proposal from its proxy materials in reliance on rule
14a-8(i)(10). Sincerely, /s/
Anne Nguyen
Attorney-Advisor
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