November 4, 2013 - The U.S. Department of Justice (DOJ) announced that Johnson & Johnson (J&J) and some of its subsidiaries will pay over $2.2 billion due to allegations regarding several prescription drugs. The claims include promotion of the drugs for unapproved uses ("off-label" use), as well as kickback payments to physicians and to Omnicare Inc. - the biggest U.S. long-term care pharmacy provider. The monetary sanctions include $485 million in criminal fines and forfeiture and $1.72 billion in civil settlements involving the federal and state government. This renders DOJ's resolution "one of the largest health care fraud settlements in U.S. history."
Based on both civil claims and guilty pleas to certain criminal charges, J&J and its subsidiaries Janssen Pharmaceuticals Inc. (Janssen) and Scios Inc. actively promoted major prescription drugs for "off-label" uses which have not been deemed safe and effective by the Food and Drug Administration (FDA). Furthermore, the promotion of one such drug "threatened the most vulnerable populations of [the] society - children, the elderly and those with developmental disabilities," according to Zane Memeger, U.S Attorney for the Eastern District of Pennsylvania. In fact, the FDA has repeatedly warned Janssen that marketing the drug "as safe and effective for the elderly would be 'misleading'." Despite the fact that J&J and Janssen knew that the drug can have serious health effects in the elderly and children, they "downplayed these risks." Janssen even "paid speaker fees to doctors to influence them to write prescriptions for [the drug]."
J&J and Janssen also paid millions of dollars in kickbacks to Omnicare Inc. to "induce [the organization] and its hundreds of consultant pharmacists... to promote... [certain] J&J drugs in nursing homes." In addition, the "off-label" promotion of another drug by J&J and Scios Inc. "caused false and fraudulent claims to be submitted to federal health care programs..."
Besides the large monetary sanctions, DOJ's resolution includes an agreement between J&J and the Department of Health and Human Services Office of Inspector General. The agreement aims "to increase accountability and transparency and prevent future fraud and abuse."
According to Attorney General Eric Holder, "[J&J's] conduct at issue... jeopardized the health and safety of patients and damaged the public trust..." And, according to John Roth, Director of the FDA's Office of Criminal Investigations, the "settlement [with regards to one of the drugs involved] demonstrates the government's continued focus on pharmaceutical companies that put profits ahead of the public's health."
November 7, 2013 (update) - As part of the settlement agreement, Janssen pled guilty to a misdemeanor charge for misbranding a drug that was at one time J&J's largest seller. This criminal charge included promotion of the drug to the elderly for off-label uses. As commented by the U.S. District Judge Timothy Savage, who approved Janssen's guilty plea, Janssen "acted in a 'calculated manner' with intent to 'maximize profits with no regard to risk.'"
Under the plea agreement, J&J's subsidiary Janssen will pay $400 million, of which $336 million are for criminal fines, and $66 million are forfeited to the U.S. government. According to Zane Memeger, U.S Attorney for the Eastern District of Pennsylvania, the settlement is the largest in U.S. history involving a single drug.
U.S. Department of Justice, click here
FDA, click here
Bloomberg Businessweek, click here