Johnson & Johnson to pay $2.2 BILLION in U.S. health care fraud settlement

CBS/AP/ November 4, 2013, 12:05 PM

Johnson & Johnson to pay $2.2B in U.S. health care fraud settlement

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This file photo shows Attorney General Eric Holder, who announced the $2.2 billion settlement with Johnson & Johnson Monday, Nov. 4 in Washington, D.C. / CBSNEWS

WASHINGTONHealth care giant Johnson & Johnson and its subsidiaries have agreed to pay over $2.2 billion to resolve criminal and civil allegations of promoting three prescription drugs for off-label uses not approved by the Food and Drug Administration, the Department of Justice announced on Monday.

"The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust," Attorney General Eric Holder said in a statement. "This multibillion-dollar resolution demonstrates the Justice Department's firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people."

The allegations include paying kickbacks to physicians and pharmacies to recommend and prescribe Risperdal and Invega, both antipsychotic drugs, and Natrecor, which is used to treat heart failure.

The figure -- one of the largest health care fraud settlements in U.S. history -- includes $1.72 billion in civil settlements with federal and state governments as well as $485 million in criminal fines and forfeited profits.

The government's criminal complaint over Risperdal charged that from 2002 to 2003, sales representatives of J&J subsidiary Janssen Pharmaceuticals promoted the antipsychotic to physicians and other prescribers who treated elderly dementia patients by urging them to use the drug to treat symptoms such as anxiety, agitation, depression, hostility and confusion despite the drug only being approved to treat schizophrenia at that time. Sales reps were allegedly offered incentives for off-label promotion of the drug.

The complaint also alleged that Janssen knew patients taking Risperdal had an increased risk of developing diabetes, but still promoted the drug as "uncompromised by safety concerns."

For Invega, the government alleged J&J and Janssen marketed the antipsychotic for off-label unapproved indications from 2006 to 2009, and made false and misleading statements about its safety and efficacy.

The settlement with Janssen also resolved allegations that the companies paid kickbacks to Omnicare Inc., the nation's largest pharmacy specializing in dispensing drugs to nursing home patients, to further efforts to target elderly people with dementia.

The Natrecor settlement with J&J subsidiary Scios Inc. resolves allegations that the company in 2009 aggressively marketed the heart failure drug for unapproved uses with "no sound scientific evidence supporting the medical necessity."

The agreement is the third-largest U.S. settlement involving a drugmaker, and the latest in a string of legal actions against drug companies allegedly putting profits ahead of patients.

In recent years, the government has cracked down on the industry's aggressive marketing tactics, which include pushing medicines for unapproved uses. While doctors are allowed to prescribe medicines for any use, drugmakers cannot promote them in any way that is not approved by FDA.

Last year British drugmaker GlaxoSmithKline paid a record-setting $3 billion in fines to settle criminal and civil violations involving 10 of its drugs including for misbranding popular antidepressant drugs Paxil and Wellbutrin.

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