Johnson & Johnson to Settle Fraud Claims For $2.2B; Whistleblowers to Get $130M

Posted: 11/06/2013  browse the blog archive
Johnson & Johnson to Settle Fraud Claims For $2.2B; Whistleblowers to Get $130M

Johnson & Johnson (J&J) will pay more than $2.2 billion to resolve criminal and civil liability allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and, payment of kickbacks to physicians and to pharmacy providers, the U.S. Department of Justice announced earlier this week.  The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements for False Claims Act violations totaling $1.72 billion.

The government alleged that Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal, which was approved by the FDA only to treat schizophrenia, into interstate commerce for an unapproved uses. Janssen’s sales representatives allegedly promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. 

Janssen also allegedly created written sales aids for use by their ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia.  The company 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 settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. 

The government alleged 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.

In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).  This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.

The lawsuit was originally filed by former employees across multiple states under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Whistleblowers in the Eastern District of Pennsylvania will receive $112 million while whistleblowers in the Districts of Massachusetts and the Northern District of California will receive $28 million as their portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.