Johnson & Johnson To Pay More Than $1.6 Billion To Resolve Healthcare Fraud Allegations

Monday, November 4, 2013

Tennessee will receive more than $12 million as part of a multistate and federal agreement resolving allegations pharmaceutical manufacturer Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, Inc., used deceptive marketing tactics. Specifically, the parties will pay $1.6 billion to resolve civil and criminal allegations of unlawful marketing practices to promote the sales of their atypical antipsychotic drugs, Risperdal and Invega. 

J&J and Janssen will pay in excess of $1.2 billion to the states and the federal government to resolve four qui tam, or whistleblower, lawsuits filed in the U.S. District Court for the Eastern District of Pennsylvania under the provisions of the federal False Claims Act and similar state False Claims statutes. In addition, Janssen Pharmaceuticals, Inc. will plead guilty in federal court to a criminal misdemeanor charge of misbranding Risperdal in violation of the Food, Drug, and Cosmetic Act.  As part of the criminal plea, Janssen has agreed to pay an additional $400 million in criminal fines and forfeitures.

“We applaud the cooperative work of the states and federal government to stop drug companies from illegally marketing potentially dangerous drugs to the public,” Tennessee Attorney General Bob Cooper said.  “The public needs to be able to trust those responsible for their health and well-being, and that includes drug manufacturers and those who prescribe medications.” 

J & J and Janssen allegedly promoted, marketed and introduced Risperdal and Invega into interstate commerce for uses not approved by the Food and Drug Administration and for uses that were not medically indicated.  Once the FDA approves a drug as safe and effective, a manufacturer cannot market or promote a drug for an “off-label” or other use not identified in the FDA-approved product label.  The states contend that during the period Jan. 1, 1999 through Dec. 31, 2005, the companies promoted Risperdal for off-label uses and made false and misleading statements about the safety and efficacy of Risperdal.

The states additionally allege J&J and Janssen paid illegal kickbacks to health care professionals and long-term care pharmacy providers to induce them to promote or prescribe Risperdal to children, adolescents and the elderly when there was no FDA approval for Risperdal use in these patient populations. The states further contend that from Jan. 1, 2007 through Dec. 31, 2009, the companies promoted Invega for off-label uses and made false and misleading statements about the safety and efficacy of Invega.  The manufacturers’ alleged unlawful conduct caused false and/or fraudulent claims to be submitted to or caused purchases by government funded health care programs, including the state Medicaid programs. 

As part of the global resolution, the companies will enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General, which will monitor the company’s future marketing practices.

A team from the National Association of Medicaid Fraud Control Units worked with the federal government on the investigation and conducted the settlement negotiations with the pharmaceutical manufacturers on behalf of the states.  Team members included representatives from the Offices of the Attorneys General for the states of New York, Massachusetts, Ohio and California.

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