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Johnson & Johnson to Pay $2.2 Billion

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Johnson & Johnson (J&J), multinational icon in the pharmaceutical, consumer goods and medical devices industries, has been charged with false marketing and as a result will pay $2.2 billion in damages. The controversy and lawsuit center around the schizophrenia drugs Risperdal and Invega and the heart-failure drug Natrecor.

The penalties include fines and forfeiture to the federal government and to whistleblowers in three states. The settlement covers claims that J&J marketed the drugs for unapproved uses and gave kickbacks to healthcare providers and nursing homes.

As noted by U.S. Attorney General Eric Holder, J&J and two of its subsidiaries – Janssen Pharmaceuticals and Scios – “lined their pockets at the expense of American taxpayers, patients and the private insurance industry.”

The Details behind the Charges
The settlement charges that:

  • J&J improperly marketed Risperdal for the treatment of psychotic symptoms in elderly non-schizophrenic patients, even though it was approved to treat only schizophrenia.
  • Both Risperdal and Invega were falsely marketed for dementia treatment. This led insurance companies to pay for related inappropriate claims.
  • Natrecor was marketed as treatment for patients with less severe heart failure than indicated in its Food & Drug Administration approval.

A Historic Settlement
The penalty imposed on J&J and its partners is one of the country’s largest healthcare-related settlements. In addition, one plaintiff’s attorney cited it as the largest whistleblower payout in U.S. history.

  • Whistleblowers in Pennsylvania will receive $112 million, while payouts in Massachusetts and California will total $28 million each.
  • The California payout goes to a single Scios employee who first brought suit against J&J in 2005 and ultimately helped government attorneys build their case.

In 2011, J&J paid Arkansas $1.2 billion in fines related to deceptive marketing and false claims about Risperdal.

As part of this year’s lawsuit, it was charged that the company knew that patients on the drug were at increased risk of developing diabetes, but did not publicly acknowledge this potential side effect. In addition, J&J promoted Risperdal in nursing homes in part by sending paid pharmacists to review patient records. Holder noted that kickbacks and other incentives to these “extensions of the J&J sales force” could have threatened the health of some patients.

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