Pharmaceutical firm Johnson & Johnson has confirmed it is under a criminal investigation by the US government for alleged record-keeping irregularities at one of its drug-making plants in Puerto Rico.

The plant, which manufactures the firm's Eprex drug, used to treat anaemia, is linked to 141 reported cases of illness from Canadians and Europeans who have taken the drug.

Eprex increases the level of red-blood cells, a therapy often prescribed for people undergoing kidney dialysis or treatment for anaemia related to chemotherapy.

Reports of the investigation were first reported in Friday editions of the New York Times newspaper.

A spokesman for New Jersey-based Johnson & Johnson said it believes the US Food and Drug Administration (FDA) is looking into allegations by a former employee of the plant who was fired in 1999.

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The employee, Hector Arce, says Johnson & Johnson pressed him to falsify data to cover lapses in the manufacture of Eprex and then suspended him a few days before an expected interview with FDA inspectors, the Times reported.

"We find no support for the allegations by the employee, said company spokesman Jeffrey Leebaw, who added the firm intends to "vigorously defend against the employee's lawsuit."

The FDA is joined in its investigation by the Justice Department, which are conducting a criminal investigation related to the lawsuit filed by Mr Arce.

Johnson & Johnson said its dismissal of Mr Arce is not related to the alleged cover-up. Rather, it says he was fired for dishonesty and repeatedly violating company policies, the Times reported.

Shares of Johnson & Johnson, a component of the Dow Jones industrial average, fell 16% shortly after trading began on the New York Stock Exchange, sending the leading index of US stocks 200 points lower in early trade on Friday.