In one of the largest healthcare fraud settlements in US history, Johnson & Johnson will pay $2.2 billion (€1.6bn) to end civil and criminal investigations into kickbacks to pharmacists and the marketing of pharmaceuticals for off-label uses, US attorney general Eric Holder has said.
The resolution of the long-running case covers the marketing of the anti-psychotic drugs Risperdal and Invega and the heart drug Natrecor over several years.
From 1999 through 2005, J&J and its subsidiary Janssen Pharmaceuticals promoted Risperdal for unapproved uses, including controlling aggression and anxiety in elderly dementia patients and treating behavioural disturbances in children and in individuals with disabilities, according to the complaint.
The off-label marketing cost US government insurance programmes hundreds of millions of dollars in uncovered claims, the complaint said.
Under the settlement, Janssen will plead guilty to a single misdemeanour violation for its promotion of Rispersdal.
Meanwhile, the company paid millions of dollars in kickbacks to Omnicare, the nation’s largest pharmacy specialising in dispensing drugs to nursing home patients, under various guises, including “educational funding”.
Johnson & Johnson’s conduct “recklessly put at risk” the health of children, dementia patients and others to whom the drug was prescribed at a time it was only approved by the US Food and Drug Administration to treat schizophrenia, Mr Holder said.
Janssen’s sales representatives “aggressively” promoted Risperdal to doctors and other prescribers who treated elderly dementia patients, and through a special “ElderCare sales force” targeted nursing home operators.
“The company also provided incentives for off-label promotion” and based sales representatives’ bonuses on total sales, not just sales for FDA-approved uses, the DOJ said.
Under FDA regulations, doctors may prescribe drugs for unapproved, or off-label, use. But pharmaceutical companies are allowed to market their drugs in the US only for FDA-approved uses.
The FDA said it had delivered repeated warnings to Janssen about “misleading marketing messages” to doctors, and later initiated a criminal complaint.
As part of the settlement, Justice Department lawyers filed a civil complaint against Johnson & Johnson in US District Court for the Eastern District of Pennsylvania on Monday.
Johnson & Johnson said that the settlement of “the civil allegations is not an admission of any liability or wrongdoing, and the company expressly denies the government’s civil allegations”.
Monday’s settlement also resolved allegations that J&J and a subsidiary, Scios, marketed Natrecor for off-label uses not approved by the FDA and not covered by federal healthcare programmes.
J&J disclosed in a securities filing in 2011 it had reached an agreement to resolve criminal penaltiesrelated to the promotion of Risperdal, which was once one of the company’s biggest sellers, but that certain issues remained open.
The company on Monday said no additional charges will be recorded to earnings in connection with the settlement. J&J shares were down about 0.9% in midday trading on the New York Stock Exchange.
Most large drugmakers have had to pay major fines to the US government and various states over the past decade for alleged improper marketing of their medicines.
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