Johnson & Johnson and Subsidiaries Will Pay More than $2.2 Billion in Civil and Criminal Settlements

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The Department of Justice has announced that global health care giant Johnson & Johnson and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil cases arising relating to the drugs Risperdal (risperidone), Invega (paliperidone) and Natrecor (nesiritide). The allegations in these cases include promotion of the drugs for uses not approved by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to Omnicare Inc., the largest dispenser of drugs to nursing homes.

This is one of the largest health care fraud settlements in U.S. history, according to a news release from the Department of Justice. The criminal fines and forfeiture total $485 million and civil settlements with the federal government and states total $1.72 billion. “The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder.  The resolution includes criminal fines and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries. The government also alleges that J&J and Janssen were aware that Risperdal poses serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks.  The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).”

In a “criminal information” filed in the Eastern District of Pennsylvania, the government charged that Janssen Pharmaceuticals Inc., a J&J subsidiary, promoted the antipsychotic drug Risperdal for an unapproved use, which is not permitted by law. Risperdal was approved only to treat schizophrenia, but the government alleges that Janssen’s sales representatives promoted Risperdal for to treat such symptoms as anxiety, agitation, depression, hostility and confusion in elderly dementia patients. The Justice Department says the company created written sales materials mentioning such symptoms but minimized the FDA-approved use for Risperdal, the treatment of schizophrenia. According to the news release, the company also provided incentives for off-label promotion by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.