Johnson & Johnson (J&J) said that it had agreed to pay $181 million to settle consumer fraud claims by 36 U.S. states and the District of Columbia for improperly marketing its Risperdal anti-psychotic drug for unapproved uses.
J&J and its Janssen unit settled claims that it promoted the drugs from 1999 through 2005 for uses not approved by the U.S. Food and Drug Administration. J&J has also been targeted by federal authorities for separate (but related) allegations, including their improper promoting of its drug for use in nursing homes.
The pharmaceutical giant and its subsidiaries agreed to pay $485 million in criminal fines and forfeiture, and $1.72 billion in civil settlements with the federal government and several states. The agreement also requires the company to modify its business practices related to drug marketing.
This deal is said to be the largest multistate consumer protection pharmaceutical settlement.
J&J claims that they have already set aside funds to cover the civil settlement, but states that the settlement was not an admission of wrongdoing. The funds will be divided among the states participating in the agreement just announced.
Annual sales of Risperdal, which was more than $4 billion at its peak, have decreased significantly due to cheaper generic versions.
J&J agreed and said it would not promote any of its newer anti-psychotics for off-label uses or make any false or misleading claims about them.
The company said that it separately agreed in principal to settle three False Claims Act lawsuits. They involve Medicaid-related claims for Risperdal, Invega and the heart-failure drug Natrecor, as well as kickback allegations involving Omnicare, Inc. as we reported a few days ago.
J&J will pay as much as $2.2 billion, according to sources familiar with the matter.
The states separately filed lawsuits that made similar claims about how J&J made false and deceptive claims over Risperdal and Invega, promoted them for off-label uses, misused continuing medical education programs. In a related civil complaint, the Justice Department says that Janssen promoted Risperdal to control the behavior of elderly nursing home patients, patients with Alzheimer’s disease, dementia, depression and anxiety, when it was never approved for such uses, states claimed.
Janssen promoted Risperdal for use in children, even though Risperdal has not been established as safe and effective in children, according to N.Y.’s complaint.
It was said that the company made “false and misleading statements” about Risperdal’s benefits and minimized the risks.
Florida’s complaint was that the company used speaker programs on unapproved uses, had sham consulting programs for physicians and made lucrative agreements with doctors who prescribed the drug off-label. According to Florida’s complaint, Johnson & Johnson “sought to enhance Risperdal’s off-label market penetration across a wide range of diagnoses and patient populations.”
The settlement will require J&J to abide by a five-year corporate integrity agreement. Under one provision, the company will have to change its bonus program to allow for recouping payments made to executives found to have engaged in misconduct. It appears that the company will also be required to be more transparent about research, publication policies and payments to physicians.
Hopefully, this settlement will prove to be an example to other pharmaceutical companies that try to put their profits before the safety of the American public.
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