J&J to Pay $2 Billion for Improperly Marketing Antipsychotic Drug
MONDAY Nov. 4, 2013 -- Johnson & Johnson will pay more than $2 billion in fines and plead guilty to a misdemeanor for improperly marketing its antipsychotic drug Risperdal and two other medications, the U.S. Department of Justice announced Monday.
Risperdal is approved in the United States to treat symptoms of mental illnesses such as schizophrenia and bipolar mania, and to ease irritability in those with autism.
However, a long-running federal investigation found the company was promoting the drug for unapproved uses, marketing it to doctors who had elderly patients with dementia or Alzheimer's, but not schizophrenia, government officials said.
Investigators also claimed that the company was paying kickbacks to doctors and pharmacies in an effort to increase sales of the drug.
Attorney General Eric Holder outlined the scope of the settlement during a Monday afternoon news conference.
"We are here to announce that Johnson & Johnson and three of its subsidiaries have agreed to pay more than $2.2 billion to resolve criminal and civil claims that they marketed prescription drugs for uses that were never approved as safe and effective -- and that they paid kickbacks to both physicians and pharmacies for prescribing and promoting these drugs," Holder said.
"Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients and the private insurance industry," Holder added. "They drove up costs for everyone in the health care system and negatively impacted the long-term solvency of essential health care programs like Medicare.
"The settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members of our society, including young children, the elderly and the disabled," Holder said.
The criminal fines will total $400 million, while $1.2 billion will settle civil cases with the federal government and 45 states, the Justice Department said in a statement. An additional $149 million will cover the kickback claims. Another $184 million will settle claims that the company improperly marketed its expensive Natrecor drug to heart failure patients when there was no evidence it actually improved the condition. The company had also faced claims it improperly promoted a newer antipsychotic, Invega, the Justice Department said.
The Wall Street Journal reported that the company said it had already set aside the money to cover the settlement. The company said the settlement of civil allegations wasn't an admission of wrongdoing or liability, the newspaper said.
The settlement still has to be approved by a judge. That hearing will be held Thursday in Philadelphia, The New York Times reported.
For more on the settlement, go to the U.S. Department of Justice.
Posted: November 2013