If approved by the courts the decree enables the US Food and Drug Administration (FDA) to govern operations at three of the plants and subjecting J&J to years of further scrutiny.
It also prevents any manufacturing or distribution of drugs to take place from the company's Fort Washington, Philadelphia, US plant until the agency allows it to reopen.
Deborah Autor, director of the FDA's office of compliance in the agency's drug division, said: “This is a strong, but necessary step to ensure that the products manufactured by this company meet federal standards for quality, safety and purity.”
Johnson & Johnson subsidiary, McNeil, closed its Fort Washington plant last year after a slew of product recalls caused major controversy.
Customers complained of “musty odours” coming from bottles of its OTC painkillers, Tylenol and Motrin, and its antacid, Rolaids. The problem was eventually attributed to wood stain contamination from loading pallets.
Subsequent FDA inspections identified a number of quality control violations, and as a result the company received a warning letter from the FDA in January 2010. McNeil said it would not reopen the plant until it had FDA approval.
The company's other Philadelphia-based plant in Lancaster will continue operating, as will its Las Piedras plant in Puerto Rico. However, both will be subject to a strict FDA-enforced timetable to bring them into full compliance, involving inspections by independent experts.
The decree also names recently appointed vice president of quality at McNeil Consumer Healthcare, Veronica Cruz, and vice president of operations for OTC products, Hakan Erdemir, along with the company.
In explaining the reasons behind individual's names appearing on the document, Douglas Stearn, assistant director of the FDA's office of compliance, said: “We seek to have responsible officials named in the decree to ensure compliance with the decree.”
Under the agreement the company will also be forced to destroy drugs manufactured at all three of the McNeil-controlled sites since 2009.
If any sites violate the terms of the decree, the agency can order the cessation of all manufacturing, recall products and “take other corrective actions”, which includes imposing fines of up to $15,000 (€11,000) per violation, per day up to a maximum of $10m (€7m) annually if the company is not fully compliant with government manufacturing rules.