July 19, 2002

Food and Drug Administration and Justice Department are conducting criminal investigation into Johnson & Johnson factory in Puerto Rico that makes anemia drug Eprex that has been linked to spate of serious illnesses in Europe and Canada; Eprex users developed pure red cell aplasia, condition in which body can lose its ability to produce red blood cells, leaving patient dependent on blood transfusions to survive; probe is tied to whistle-blower lawsuit filed against Johnson & Johnson by former employee Hector Arce; Arce contends he was pressed to falsify data to cover up manufacturing lapses and then was suspended few days before expected interview with FDA inspectors; Johnson & Johnson denies accusations (M)

Novation, group that buys medical supplies for third of nation's hospitals, received two highly unusual payments totaling $1.1 million from Becton Dickinson & Co, which got exclusive right to market hypodermic needles and other products to group's hospitals; several legal experts say they find payments to Novation troubling because they might be construed as kickbacks if they were used to obtain business; Novation says Becton Dickinson paid it $1 million in 'special marketing' fees in 2000 in connection with three-year contract for syringes and needles; payment came at time when health care workers and others were saying that some Becton Dickinson products did not provide enough protection for medical workers against accidental needle sticks; smaller manufacturers are also beginning to challenge Becton Dickinson with new safety products; Becton Dickinson has also made separate payment of $100,000 to Novation in connection with smaller, four-year contract for intravenous catheters that took effect in 1999; Julia Naunheim Hipps, nurse who says she got hepatitis C in needle stick, says hospital buying groups can be roadblocks to safer products; photo (M)

Expel Traficant, Panel Urges The House ethics committee called for the expulsion of Representative James A. Traficant Jr. of Ohio on charges stemming from his racketeering conviction. PAGE A12 New President of India An eccentric nuclear scientist, A. P. J. Abdul Kalam, became the third Muslim in the largely ceremonial post, with the sponsorship of the ruling Hindu nationalists. PAGE A4

Nokia reports surge in second-quarter profit, but it says sales for period fell, as new demand for mobile phones and other telecommunications equipment failed to materialize; company partly offset effects of 6 percent decline in sales, to 6.9 billion euros, by keeping tight rein on costs; profits surged 46 percent, to 862 million euros; photo (M)

New York City Mayor Michael Bloomberg announces his appointments to new educational policy panel that is central element of mayoral control of city schools; group is distinctly less political than old Board of Education; appointees are Philip A Berry, Dr David C Chang, Dr Ramona Hernandez, Dr Augusta Souza Kappner, Susana Torruella Leval, Richard L Menschel and Marita Regan; biographical information; photos (M)