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Health Care Fraud Cases Nail Johnson & Johnson

WASHINGTON (CN) - Johnson & Johnson agreed Monday to pay more than $2.2 billion to resolve criminal and civil actions related to its promotion of certain prescription drugs.

Federal prosecutors said the health care giant and its subsidiaries promoted Risperdal, Invega and Natrecor for uses not approved as safe and effective by the Food and Drug Administration.

The nation's largest long-term care pharmacy provider also faced claims that it paid kickbacks to physicians.

Attorney General Eric Holder touted the global resolution as one of the largest health care fraud settlements in U.S. history.

It involves criminal fines and forfeiture totaling $485 million, and civil settlements with the federal government and states totaling $1.72 billion.

Johnson & Johnson will also now face stringent requirements under a corporate integrity agreement designed to increase accountability and transparency and prevent future fraud and abuse.

The most recent of the actions against Johnson and Johnson subsidiary Janssen Pharmaceuticals were filed simultaneously with the civil settlement and guilty plea Monday.

Federal prosecutors had claimed in a Pennsylvania criminal information that, from March 3, 2002, through Dec. 31, 2003, Janssen misbranded its antipsychotic drug Risperdal by introducing it into interstate commerce for an unapproved use.

Risperdal was approved only to treat schizophrenia for most of this time period, but Janssen's sales representatives allegedly promoted it as a treatment for anxiety, agitation, depression, hostility and confusion.

Janssen "also provided incentives for off-label promotion and intended use by basing sales representatives' bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses," the Justice Department said in a statement.

In its guilty plea to those 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."

The deal requires Janssen to pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million.

Uncle Sam had also filed a civil complaint against Johnson and Johnson and Janssen related to its off-label marketing of the drugs Risperdal and Invega.

The complaint notes the FDA repeated advisement to Janssen that it would be "misleading" to market Risperdal as safe and effective for the elderly.

Indeed, rather than the manifestation of a psychotic disorder, behavioral disturbances in elderly dementia patients might be "appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control," the complaint states.

Risperdal use also had a known connection to increased risk of strokes, but Janssen downplayed these risks, according to the complaint.

And despite its known connection to an increased risk of developing diabetes, Janssen promoted Risperdal as "uncompromised by safety concerns (does not cause diabetes)," the complaint states.

Risperdal also posed certain health risks to children, such as causing elevated levels of prolactin, a hormone that can stimulate breast development and milk production, but Janssen allegedly made it a point "to grow and protect the drug's market share with child/adolescent patients," the Justice Department said.

"Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children," its statement continues.

Janssen settled those claims and allegations relating to its newer antipsychotic drug Invega.

Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government said that J&J and Janssen marketed the drug between 2006 and 2009 for off-label indications. It also allegedly made false and misleading statements about the drug's safety and efficacy.

Johnson and Johnson and Janssen's settlement of these claims totals $1.391 billion. That figure includes $1.273 billion to be paid as part of the latest resolution, as well as $118 million paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal.

The federal and state governments will share the additional payment Johnson and Johnson made as part of Monday's settlement. Of that amount, $749 million will go to the federal government, and $524 million will go to the states.

The federal government and Texas each received $59 million from the Texas settlement.

Uncle Sam had filed its kickback claims against Johnson and Johnson three years ago in Massachusetts.

Monday's civil settlement resolves the allegations of that case, which describes the payment of kickbacks to Omnicare in furtherance of Johnson and Johnson's efforts to target elderly dementia patients in nursing homes.

Omnicare is the nation's largest pharmacy specializing in dispensing drugs to nursing home patients.

In settling these claims, Johnson and Johnson and Janssen will pay $149 million, most of which accounts for the federal share. The five participating states' total share is $17 million.

Omnicare meanwhile paid $98 million in 2009 to resolve its civil liability for these claims, the Justice Department noted.

The government's case with regard to the off-label promotion of the heart-failure drug Natrecor was filed in 2009 in San Francisco.

Johnson and Johnson subsidiary Scios was involved in that case.

Those companies agreed Monday to resolve their civil liability in this case for $184 million. Scios also pleaded guilty in 2011 to a misdemeanor FDCA violation, carrying a $85 million criminal fine, for its off-label promotion of Natrecor.


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