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Johnson & Johnson and Subsidiaries Agree to $2.2 Billion Global Settlement of Whistleblower Lawsuit

The Department of Justice announced that worldwide healthcare company Johnson & Johnson and its subsidiaries, Janssen Pharmaceuticals, Inc. and Scios, Inc., have agreed to settle criminal and civil allegations concerning the promotion of off-label uses for the prescriptions drugs Risperdal, Invega, and Natrecor, and the payment of kickbacks.

According to its website, Johnson & Johnson employs more than 128,000 people in 60 countries through 275 operating companies. The Justice Department said the global settlement resolves multiple whistleblower lawsuits filed in Pennsylvania, Massachusetts, and California under the qui tam provisions of the False Claims Act, and is one of the largest health care fraud settlements in U.S. history.

The government alleged that Janssen promoted Risperdal for uses that had not been approved as safe and effective by the Food and Drug Administration. Risperdal had only been FDA-approved to treat schizophrenia. According to a criminal information filed in Pennsylvania, Janssen’s sales representatives marketed Risperdal to physicians for use in elderly dementia patients to treat anxiety, depressions, hostility, and confusion. In a plea agreement, Janssen admitted promoting Risperdal for off-label uses and agreed to pay $400 million.

In a related civil complaint, the government alleged that Janssen also promoted Risperdal for the treatment of autism, attention deficit hyperactivity disorder, and obsessive-compulsive disorder in children, even though the FDA had not approved Risperdal for use in children for any purpose. The complaint also alleges that Janssen paid illegal kickbacks to doctors in the form of speaker fees in return for writing prescriptions for Risperdal.

Janssen was also alleged to have marketed another antipsychotic drug Invega for off-label uses.

The government claimed that Johnson & Johnson and Janssen also paid kickbacks to Omnicare, Inc., the nation’s largest nursing home pharmacy, in the form of rebates, data-purchase agreements, grants, and educational funding, in order to promote the use of Risperdal in nursing home patients.

The whistleblower lawsuit filed in California alleged that Johnson & Johnson and its subsidiary Scios, Inc. promoted the drug Natrecor for uses that were not FDA-approved and were not covered by federal health care programs.

The government contends that the actions by Johnson & Johnson, Janssen, and Scios caused the submission of false claims to government health care programs such as Medicare, Medicaid, and TRICARE.

In total, the entities agreed to pay criminal fines and forfeiture totaling $485 million and $1.72 billion in civil settlements. Of the civil settlements, Florida will receive $18.6 million, with the remaining amount to be split by 39 other states and the federal government.

The whistleblowers who brought the qui tam actions will receive a percentage of the settlements as their reward. The Pennsylvania whistleblowers will share in $112 million. The Massachusetts whistleblowers will share $27.7 million. The California whistleblower will receive $28 million.

Business Litigation | False Claims Act & Whistle-blower Cases