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Nov 4, 2013

J&J, Two Subsidiaries, to Pay $2.2B in Civil, Criminal Penalties

  • Johnson & Johnson and two subsidiaries will pay a combined $2.2 billion in fines to resolve criminal and civil charges relating to the prescription drugs Risperdal, Invega, and Natrecor.

    J&J and subsidiaries Janssen Pharmaceuticals and Scios will pay $485 million in criminal penalties and $1.72 billion in civil settlements with the federal government and several states. Janssen will pay the largest portion—$1.673 billion in civil and criminal fines—to resolve allegations that it misbranded and filed false claims related to schizophrenia drug Risperdal (risperidone).

    Specifically, Janssen will pay a $400 million in criminal penalties—a $334 million criminal fine and forfeiture of $66 million—for introducing Risperdal as a misbranded drug into interstate commerce, as well as $1.273 billion in a civil settlement, under an agreement overseen by the U.S. District Court for the Eastern District of Pennsylvania. Janssen and J&J also agreed with the U.S. Department of Health and Human Services’ Office of the Inspector General to new corporate integrity requirements.

    Risperdal was first approved by FDA in 2002 for treating schizophrenia, followed a year later by short-term treatment of acute mania and mixed episodes associated with bipolar 1 disorder. The Department of Justice (DoJ) alleged that between 1999 and 2005, Janssen aggressively marketed the drug for treating agitation associated with dementia in senior citizens, without receiving approvals for that indication and subpopulation, through an “ElderCare sales force” targeting nursing homes and doctors who treated the elderly.

    About the same time, DoJ alleged, J&J and Janssen knew Risperdal posed health risks to children such as elevated levels of prolactin, yet included growing the drug’s market share with children and teens among Janssen’s business goals—in part by influencing doctors to write prescriptions for Risperdal through “speaker” fees. Until 2006, Risperdal was not approved for use in children.

    DoJ also alleged that Janssen and corporate parent J&J knew that Risperdal posed:

    • Increased risk of stroke among serious health risks for elderly patients. Janssen downplayed those risks by combining the data with results from other studies to present the appearance of lower overall risk of adverse events, according to DoJ.
    • Increased safety risk for elderly patients, based on a second study confirming the earlier health-risks study. J&J did not publish the data.
    • Increased risk of developing diabetes. Janssen responded, according to the complaint, by promoting Risperdal as “uncompromised by safety concerns (does not cause diabetes),” retaining outside consultants to reanalyze the study results, and publishing articles associating Risperdal with lower risk of the disease.

    FDA’s Office of Criminal Investigations launched a criminal investigation into Janssen’s conduct following a whistleblower complaint. Last year, J&J and Janssen paid out $118 million to the state of Texas to resolve similar off-label marketing allegations relating to Risperdal.

    J&J and Janssen were also cited for off-label marketing of antipsychotic drug Invega, approved only for schizophrenia and schizoaffective disorder, and for making false and misleading statements about its safety and efficacy.

    In addition, J&J and Janssen agreed to pay $149 million to settle DoJ claims that they paid millions of dollars in kickbacks to Omnicare—the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients—through market share rebate payments, data-purchase agreements, “grants”, and “educational funding.” The kickbacks were intended to promote the use of Risperdal and other J&J drugs in nursing homes by Omnicare and its consultant pharmacists.

    J&J and Scios agreed to pay the federal government $184 million to resolve civil charges that they caused submission of false and fraudulent claims to federal health care programs for heart failure drug Natrecor. While FDA approved Natrecor in 2001 for patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity, the complaint alleged that starting in 2009, Scios began aggressively marketing the drug for scheduled, serial outpatient infusions for patients with less severe heart failure, an off-label use not covered by federal health care programs.

    In 2011, Scios pleaded guilty to a misdemeanor violation of the Federal Food, Drug, and Cosmetic Act, and paid a criminal fine of $85 million, for introducing Natrecor into interstate commerce for an off-label use.



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