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From Health Law Daily, November 4, 2013

Johnson & Johnson agrees to pay $2.2 billion to resolve criminal and civil claims

By Harold M. Bishop, JD

Johnson & Johnson (J&J) and its subsidiaries have agreed to resolve global allegations relating to its prescription drugs Risperdal, Invega and Natrecor by paying criminal fines and forfeitures totaling $485 million and $1.72 billion in civil settlements with the federal and state governments based on violations of the False Claims Act (FCA) (Integrity Agreement Between the Office of Inspector General of the Department of Health and Human Services and Johnson & Johnson, October 31, 2013).The allegations include claims that the drugs were promoted for unapproved off-label uses and the payment of kickbacks to physicians and the largest long-term care pharmacy provider in the nation.In addition to monetary penalties, the resolution will subject J&J to a Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General (HHS-OIG).

Risperdal. In a criminal information, the government charged that, from March 3, 2002, through December 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, promoted the antipsychotic (schizophrenia) drug Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use it to treat symptoms such as anxiety, agitation, depression, hostility and confusion.In the plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients.Under the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million.

In a related civil action, the government alleges that Janssen marketed Risperdal to control the behavior of elderly nursing home residents, children, and individuals with mental disabilities.The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal, and paying kickbacks to physicians to prescribe Risperdal.

Invega. In addition to allegations relating to Risperdal, the global settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.

FCA claims for Risperdal and Invega. As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This includes $118 million that J&J and Janssen previously paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal.The $1.273 billion will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million.

Omnicare Inc. The civil settlement also resolves allegations that J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients.The complaint alleges that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, grants and educational funding.These alleged kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes.

J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs.The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million.In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.

Natrecor. The civil settlement also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. Natrecor is approved to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity.This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.

The government alleges that shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure. These infusions allegedly involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.

As part of the global resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor.

CIA. In addition to settlement of the criminal and civil violations, J&J has executed a five-year CIA with the HHS-OIG. The CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct.The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians.On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA.J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.

MainStory: TopStory AntikickbackNews FDCActNews CMPNews FCANews FraudNews MisbrandingNews PrescriptionDrugNews SafetyNews

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