The world's eighth-largest drug maker, Johnson & Johnson, has agreed to pay the U.S. government $2.2 billion to settle cases in which the government has alleged that the company and its subsidiaries promoted powerful psychiatric medications for uses not approved by the Food and Drug Administration and offered financial kickbacks for physicians who prescribed those medications frequently.
The Justice Department says Monday's agreement, which has been years in the making, is of the largest healthcare fraud settlements in U.S. history, with criminal fines totalling $485 million and civil and administrative penalties totalling $1.72 billion. Some of that penalty will go to states, which have joined the suit on the argument that the company's improper marketing defrauded those states of funds intended to insure care for the poor and disabled.
The cases involve three medications -- the antipsychotic drugs Risperdal and Invega and the heart-failure drug Natrecor -- made by Johnson & Johnson and its subsidiaries Janssen Pharmaceuticals Inc. of Titusville, N.J. (Risperdal and Invega) and Scios Inc. of Sunnyvale, Calif. (Natrecor). For 22 months ending Dec. 31, 2003, the federal government alleged, Janssen's sales force actively promoted the use of the company's antipsychotic medications for elderly patients with confusion or dementia, despite evidence that they increases the risk of stroke in such patients.
In a related complaint filed in Pennsylvania, the government has alleged that Janssen promoted the use of Risperdal from 1999 to 2005 for elderly dementia patients and to treat problematic behavior in other patients, including children, with developmental disabilities. From 2006 to 2009, the government alleges, Janssen promoted Invega for use with many of the same patients and lied about its record of safety and effectiveness.
Until late 2006, the FDA had not found Risperdal safe and effective for use in any children and had warned Janssen repeatedly against promoting the medication for pediatric use. The FDA maintained that Janssen promoted Risperdal as safe and effective in treatment of attention deficit and hyperactivity disorder, obsessive-compulsive disorder, oppositional defiance disorder and autism despite "known health risks to children and adolescents" taking such medications. Rapid weight gain and metabolic disturbance have been seen in many young patients taking drugs in the same class as Risperdal.
The government's complaint alleges that Janssen paid speaker's fees to physicians in a bid to influence them to write more prescriptions for Risperdal. It also alleges that Janssen paid millions of dollars in kickbacks to Omnicare Inc., the nation's largest pharmacy service specializing in dispensing drugs to nursing homes. The payments to Omnicare consultant pharmacists were made under the guise of market-share rebate payments, data purchasing agreements, grants and educational funding, the government alleged.
The allegations against Scios Inc. alleges that in 2001, the Johnson & Johnson subsidiary launched an aggressive campaign to market Natrecor for administration to patients with less severe heart failure than those for whom the FDA found the drug safe and effective. The FDA approved the marketing of Natrecor as a drug for patients with acute heart failure who had shortness of breath even with minimal activity. But the government said Scios' campaign resulted in the drug's widespread use as an infusion for heart patients who came to doctors' offices once or twice a week for the medication -- a use "unsupported by valid scientific evidence," according to Brian Stretch, first assistant U.S. district attorney for the Northern District of California.