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Indonesia probes suspected data breach on COVID-19 app

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People wearing protective face masks queue up to receive a vaccine dose against the coronavirus disease (COVID-19) during a mass vaccination program at a shopping mall in Jakarta, Indonesia, August 31, 2021. REUTERS/Ajeng Dinar Ulfiana

JAKARTA, Aug 31 (Reuters) – Indonesia is investigating a suspected security flaw in a COVID-19 test-and-trace app that left exposed personal information and the health status of 1.3 million people, a health ministry official said on Tuesday.

Researchers from encryption provider vpnMentor said personal information in the Indonesia Health Alert Card (eHAC) app, often required to be used by travellers, was accessible “due to the lack of protocols put in place by the app’s developers.”

Anas Ma’ruf, a health ministry official overseeing data, said the government was looking into the potential breach, but said the potential flaw was in an earlier version of the app, which has not been used since July.

“The eHAC from the old version is different from the eHAC system that is a part of the new app,” he said. “Right now, we’re investigating this suspected breach”.

The eHAC system is now part of the Peduli Lindungi (Care Protect) app, which the government has promoted for various tracing purposes, including entry at malls.

Anas urged people to delete the old app and said the breach might have originated from a partner, without elaborating. He said the current eHAC system was now managed by the government and its safety was “guaranteed”.

VpnMentor researchers said the flaw could expose people to phishing or hacking, as well as discourage people from using a COVID-19 tracing app.

Experts say such data breaches point to Indonesia’s weak cyber security infrastructure. In May, authorities also launched an investigation into an alleged breach of social security data from the country’s state insurer. read more

Reporting by Stanley Widianto; Editing by Ed Davies

Our Standards: The Thomson Reuters Trust Principles.

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Business

U.S. judge declines to stop J&J from splitting talc liabilities from main business

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Aug 26 (Reuters) – A U.S. judge declined to stop Johnson & Johnson (JNJ.N) from taking steps to offload widespread Baby Powder liabilities from the rest of its business, preserving the option for the healthcare company to move thousands of claims from people who used its talc products to a unit that would file for bankruptcy.

U.S. Bankruptcy Judge Laurie Selber Silverstein denied a request from plaintiffs’ lawyers to block the move late Thursday. Lawyers for cancer victims wanted her to issue a restraining order against J&J as part of her role overseeing the bankruptcy proceedings of one of the company’s former talc suppliers.

J&J is exploring a plan to move its liabilities from widespread Baby Powder and other talc-related litigation into a newly created business that would later seek bankruptcy protection, Reuters previously reported. The company’s talc products are currently housed in a subsidiary called Johnson & Johnson Consumer Inc. read more

“The court rightly denied the plaintiffs’ motion aimed at preventing J&J from engaging in legitimate business transactions, in the event that it chooses to do so,” said Diane Sullivan, a Weil, Gotshal & Manges LLP lawyer representing J&J, in a statement.

The legal skirmish was unusual in that plaintiffs’ lawyers were asking the judge to forbid J&J from taking steps the company’s lawyers said it had not yet decided whether to pursue. Johnson & Johnson Consumer Inc has previously said it has “not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”

The judge is overseeing the bankruptcy case of Imerys Talc America, which once supplied talc to J&J and filed for Chapter 11 court protection amid mounting litigation. Imerys and J&J have since been battling one another over whether J&J is required to cover the former supplier’s legal costs under indemnification agreements. Plaintiffs’ lawyers argued that allowing J&J to offload its talc liabilities to a unit that would file for bankruptcy would harm Imerys’ reorganization.

The judge decided it would be improper as part of Imerys’ bankruptcy case for her to legally bar J&J from undertaking a hypothetical future restructuring that might result in separating the talc liabilities. She said Imerys could take legal action against J&J should J&J decide to separate its talc liabilities in a way Imerys deems harmful or unlawful.

TEXAS TWO-STEP BANKRUPTCY

J&J faces legal actions from tens of thousands of plaintiffs alleging its Baby Powder and other talc products contained asbestos and caused cancer. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.

J&J is considering using Texas’ “divisive merger” law, which allows a company to split into at least two entities, Reuters previously reported. For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation.

The maneuver is known among legal experts as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used in recent years.

Should J&J proceed, plaintiffs who have not settled could find themselves in protracted bankruptcy proceedings with a likely much smaller company. Future payouts to plaintiffs would be dependent on how J&J decides to fund the entity housing its talc liabilities.

A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.

The blue-chip company, which boasts a market value exceeding $450 billion, faces legal actions from more than 30,000 plaintiffs alleging its talc products were unsafe. In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer. read more

Separately, plaintiffs lawyers are seeking a similar restraining order against J&J in a Missouri court. One of those lawyers, Andy Birchfield, said in a statement that he and other lawyers would study the Imerys ruling and continue attempts to prevent J&J from using the Texas law to separate its talc liabilities and steer them toward bankruptcy.

Reporting by Mike Spector, Maria Chutchian and Jonathan Stempel in New York; Editing by Chris Reese, Marguerita Choy and Karishma Singh

Maria Chutchian

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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Business

Six U.S. states do not join $26 bln opioid settlements with distributors, J&J

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Aug 23 (Reuters) – At least six U.S. states, including Georgia, did not fully sign on to a proposed $26 billion settlement with three drug distributors and Johnson & Johnson (JNJ.N), which have been accused of fueling the nation’s opioid epidemic, according to the states’ attorneys general.

States had until Saturday to decide whether to support the $21 billion proposed settlement with McKesson Corp (MCK.N), AmerisourceBergen Corp (ABC.N) and Cardinal Health Inc (CAH.N) and a separate $5 billion agreement with J&J.

But in a sign that talks were continuing despite the passing of the deadline, Georgia – the most populous hold-out state – on Monday indicated it could wind up backing the agreement.

“We have not rejected the deal, but we have not joined because at the present time joining the national settlements does not guarantee the best outcome for Georgia and its counties, cities and citizens,” said an emailed statement from the office of the attorney general, Christopher Carr. “We remain active in representing Georgia throughout negotiations, and we’re going to continue to get input from Georgia stakeholders.”

The state will litigate its claims if needed, the statement said.

New Mexico, Oklahoma, Washington and West Virginia also declined to join the deals, their state attorneys general said. New Hampshire agreed to the settlement with distributors but not the J&J agreement.

The complex settlement formula envisions at least 44 states participating, but ultimately the companies get to decide whether a “critical mass” has joined and whether to finalize the deal.

The size of the settlement is based on the number of participating states. Those that decline to join will instead seek a larger recovery by continuing to fight the defendants in the courts. The companies have already paid hundreds of millions in verdicts and other settlements.

The deal, which was unveiled by 14 state attorneys general on July 21, aims to resolve more than 3,000 lawsuits accusing the distributors of ignoring red flags that pain pills were being diverted into communities for illicit uses and that J&J played down the risks of opioid addiction.

The money would go toward funding treatment and other services.

The companies deny wrongdoing, saying the drugs were approved by the U.S. Food and Drug Administration and that responsibility for ballooning painkiller sales lies with others, including doctors and regulators.

McKesson said the companies have until Sept. 4 to determine if there is sufficient support for the agreements and said that process is ongoing. Cardinal Health and AmerisourceBergen declined to comment and J&J did not immediately respond to a request for comment.

The support of two other states, Nevada and Alabama, also appeared to be in doubt, according to sources familiar with the situation.

Nevada’s attorney general declined to comment and the Alabama attorney general did not respond to a request for comment.

The participation of states is tied closely to that of their local governments, which brought the majority of the lawsuits. Cities and counties within participating states would have through Jan. 2 to sign on. Ultimately, $10.7 billion of the settlement money is tied to the extent to which localities participate.

North Carolina Attorney General Josh Stein, a lead negotiator, last month said he expected “well north” of 40 states to join.

Reporting by Nate Raymond in Boston and Tom Hals in Wilmington, Delaware;
Editing by Noeleen Walder and Karishma Singh

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Business

U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J – sources

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A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake

July 19 (Reuters) – U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp (MCK.N), Cardinal Health Inc (CAH.N) and AmerisourceBergen Corp (ABC.N) would pay a combined $21 billion, while Johnson & Johnson (JNJ.N) would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement pricetag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs’ attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on “rumor and speculation.” They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths. read more

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc (MCDG.MU) now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively. read more

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities. read more

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers – Endo International Plc (ENDP.O), Teva Pharmaceutical Industries Ltd (TEVA.TA) and AbbVie Inc’s (ABBV.N) Allergan unit.

Reporting by Nate Raymond in Boston; Editing by Sandra Maler, Bill Berkot and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

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