Johnson & Johnson agrees to pay $2.2 billion in drug-marketing settlement

Source: Washington Post.com
Johnson & Johnson will pay $2.2 billion to resolve civil and criminal allegations involving the marketing of off-label, unapproved uses for three prescription drugs…The cases, which date from the late 1990s through the early 2000s, involve alleged kickbacks to doctors and pharmacies to promote usage of the anti-psychotic drugs Risperdal and Invega, and a heart drug, Natrecor. The widely anticipated agreement was one of the largest health-care fraud settlements in U.S. history.
Federal investigators accused a Johnson & Johnson subsidiary of promoting Risperdal for controlling anxiety and aggression in elderly dementia patients, as well as for treating behavioral problems in other “vulnerable” populations, such as children and the mentally disabled, even though the Food and Drug Administration initially had approved the drug only for schizophrenia. Officials said the company also promoted off-label uses for Invega and “made false and misleading statements about its safety and efficacy.”
In addition, Justice officials said another Johnson & Johnson subsidiary undertook an “aggressive campaign” to market the use of Natrecor for some patients with less severe heart disease than the drug was designed to treat…Monday’s settlement included criminal fines and forfeited profits of about $485 million…
In the largest settlement to date, British drug manufacturer GlaxoSmithKline last year agreed to plead guilty to criminal charges and pay $3 billion in fines for improperly marketing numerous drugs and failing to report safety data about a diabetes medication.
Federal law forbids companies from marketing drugs for uses other than those specifically approved by the FDA, although doctors may prescribe drugs for such “off-label” uses. “When pharmaceutical companies interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” John Roth, director of the FDA’s Office of Criminal Investigations, said Monday in a statement. “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public health.”
In addition to the monetary penalties, Johnson & Johnson also entered a five-year agreement with the government, requiring to the company to change its executive compensation program so that it can recoup money from employees who engage in misconduct. The agreement also requires the company to submit detailed reports to federal officials about its business operations and any payments to physicians.
Associate Attorney General Tony West said such nonmonetary provisions are an effort “to change corporate behavior” rather than to merely impose fines. “In addition to accountability,” West said, “we are looking for deterrents.”
Johnson & Johnson said it had cooperated with government investigators during years of inquiries into the various allegations. The company said one of its subsidiaries will plead guilty to a misdemeanor violation of the federal Food, Drug and Cosmetic Act for the way it promoted Risperdal. But despite the hefty settlement, Johnson & Johnson said it “expressly denies the government’s civil allegations.” The company also said that it had previously accrued the settlement amounts, and that no other charge to earnings would be recorded…
Monday’s settlement also will result in a significant payout for whistleblowers in three states — Pennsylvania, Massachusetts and California — who officials said will receive nearly $168 million of the government’s take.

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