Johnson & Johnson Settles Risperdal Case Involving Fraud and Kickbacks

Fraudently promoting drugs. Paying kickbacks to the providers who pushed them. Sounds like the storyline for a premium cable TV series, but it’s just Big Pharma behaving badly. Again.

Last week Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, agreed to pay $2.2 billion in criminal fines and civil penalties for illegally promoting the drugs Risperdal, Invega and Natrecor.

Earlier this year, we wrote that another drug manufacturer was “The Latest Star in Big Pharma’s Cast of Miscreants,” so move over, Amgen, and make room for J&J.

As summarized on AboutLawsuits.com, the settlement is the result of a Department of Justice investigation that concluded that J&J’s illegal promotion of Risperdal, approved as an antipsychotic, threatened the lives of nursing home patients. The company promoted the drug, said AboutLawsuits, as “a form of chemical restraint,” otherwise known as abuse of patients with dementia.

The kickback charges stem from J&J’s relationship with Omnicare, the nation’s largest provider of drugs to nursing homes. That enterprise settled with the DOJ in 2009.

J&J allegedly paid Omnicare millions to promote Risperdal off-label, which means a drug is used for a purpose the FDA hasn’t approved. It’s not illegal for doctors to prescribe a drug off-label, but it is illegal for the manufacturer to promote that use. J&J supposedly hid the kickback money as “data fees, education fees and payment to attend Omnicare meetings,” according to AboutLawsuits.

Several whistle-blowers who filed lawsuits against J&J and assisted in the investigation will receive $168 million as part of the settlement, reports AboutLawsuits. The money will be split among J&J employees from Pennsylvania, California and Massachusetts. One, a sales representative, wore a wire to a Risperdal sales conference to collect evidence.

In a news conference, Attorney General Eric Holder said, “In its plea agreement, Janssen admits that it promoted this drug to health-care providers for the treatment of psychotic symptoms and associated behaviors exhibited by elderly, nonschizophrenic patients who suffered from dementia – even though the drug was approved only to treat schizophrenia. We further allege that both Johnson & Johnson and Janssen Pharmaceuticals promoted Risperdal and Invega to doctors – and to nursing homes – as a way to control behavioral disturbances in elderly dementia patients, children and the mentally disabled.”

You would hope that a pharmaceutical manufacturer wouldn’t require medical lecturing by bureaucrats, but its willful disregard of repeated DOJ warnings resulted in the feds telling J&J that behavioral disturbances by elderly patients may not be signs of psychotic disorders; that some such behavioral problems were probably “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”

Putting demented elderly people at risk wasn’t enough for J&J-it saw an emerging, if illegal market, among children, too. In 2010, the DOJ filed a complaint against the company, accusing it of illegally promoting Risperdal for children, even though the FDA had not approved it for that younger demographic. Studies have shown, in fact, that the side effects of Risperdal in children include an increased risk of diabetes.

In addition to the health risks of misusing of Risperdal, J&J was called on the carpet for wasting money and resources. “Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients, and the private insurance industry,” Holder said.

“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.”

As AboutLawsuits points out, the settlement is only the latest financial tonnage the company is going to have to bear-it was ordered to pay $327 million to South Carolina for illegally promoting the drug and overstating its benefits, but J&J is appealing. Three other states also have fined the company millions for illegally marketing Risperdal.

You have to wonder how much J&J really believes in the Corporate Integrity Agreement it is obliged to sign in conjunction with the new settlement. That document is a five-year obligation by the company to make major changes to how its pharmaceutical subsidiaries do business. It holds individual executives responsible for misconduct and enhances transparency in things like how payments are made to physicians. The company must submit a detailed annual report on how it is complying with the agreement.

To read the DOJ news release about the case and details of the settlement, link here.