Johnson & Johnson Settles Drug Case for $2.2 Billion

Johnson & Johnson (J&J), the world’s eighth-largest drug maker, has agreed to pay more than $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 U.S. Food and Drug Administration (FDA) and offered financial kickbacks for physicians who frequently prescribed those medications.

These powerful psychiatric drugs were given to children, seniors and disabled patients, despite being unapproved, the Department of Justice announced on Monday.

Justice Department officials alleged that J&J used illegal marketing tactics and kickbacks to persuade physicians and pharmacists to prescribe Risperdal and Invega, both antipsychotic drugs, as well as Natrecor, which is used to treat heart failure.

The settlement amount includes $1.72 billion in civil payments to federal and state governments, as well as $485 million in criminal fines and forfeited profits.

This is the latest case of pharmaceutical marketing tactics used in order to increase sales by pushing medicines for unapproved or “off-label” uses. Regulators are working aggressively to try to hold these companies accountable.

Although doctors are allowed to prescribe medicines for any use, drug makers cannot promote them in any way that is not approved by the FDA.

“Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health-care providers, jeopardize the public health, and take money out of taxpayers’ pockets,” said Attorney General Eric Holder.

The FDA first approved Risperdal tablets for use in the treatment of schizophrenia in 1993, but prosecutors say J&J began promoting the drug for unrelated uses by the end of the decade. Risperdal then grew to become J&J’s top product by 2005, with sales over $3.5 billion.

In its plea agreement, J&J subsidiary Janssen Pharmaceuticals admitted to promoting Risperdal as a way to control erratic behavior in seniors with dementia. Today that use is explicitly barred in the drug’s warning label since it can increase the risk of stroke and death in elderly patients.

Off-label use of the drugs became so widespread that 25 percent of nursing home patients were on antipsychotics last year and the federal Centers for Medicare and Medicaid Services issued a directive to reduce usage in each facility by 25 percent.

At the time, patient advocates, such as Robyn Grant, director of public policy at the National Consumer Voice for Quality Long-Term Care, called the medications a form of “chemical restraint” and noted that many patients are rendered incoherent and barely conscious after taking the drugs.

Janssen agreed to plead guilty to violating drug-marketing laws and will pay $400 million in fines and forfeited sales.

In a separate civil complaint, the government alleged that J&J and Janssen promoted Risperdal and a similar drug, Invega, to control numerous behavioral problems in seniors, children and the mentally disabled between 1999 and 2005.

There were documents filed in the case showing that the government raised objections about the company’s marketing approach for years. In a letter in 1999, the FDA warned Janssen that “disseminating materials that state or imply that Risperdal has been determined to be safe and effective for the elderly population” would be “misleading.”

Despite such warnings, the company’s marketing plan targeted nursing homes and doctors who treated the elderly. Marketing materials distributed by an “Elder Care sales force” emphasized Risperdal as a treatment for seniors with disorders such as agitation, depression and hostility. The company also downplayed the drug’s risks, including diabetes and weight gain.

At the same time, the drug maker was allegedly paying kickbacks to the nation’s largest nursing home pharmacy, Omnicare.  J&J paid millions in bogus grants and education payments to persuade hundreds of pharmacists at Omnicare to recommend Risperdal to nursing homes. The government said the payments amounted to kickbacks.

The company also set business goals to increase drug sales to children and adolescents. Janssen instructed its sales representatives to call on child psychiatrists and to market Risperdal as a treatment for common childhood disorders, such as autism and attention deficit disorder.

Fines are not enough of a deterrent to big drug companies, patient advocates say.

Public Citizen, a national nonprofit consumer advocacy organization, reported in 2012 that “Johnson & Johnson racked up $2.3 billion in criminal and civil penalties for various allegations of wrongdoing from 1991 through July 2012,” Sammy Almashat, a researcher with Public Citizen, said in a statement Monday.

Specifically, J&J agreed to pay $181 million to resolve claims made by 36 states in August 2012 for improperly marketing Risperdal.

J&J’s “status as a repeat offender demonstrates that despite the seemingly large sums, the fines imposed on pharmaceutical companies for dangerous and illegal conduct pale in comparison to the profits generated from such activity,” Almashat said. “Global sales of Risperdal totaled $24 billion between 2003 and 2010, ten times today’s settlement amount. Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become common, companies will continue defrauding the government and putting patients’ lives in danger.”

In a separate civil complaint, the government alleged that J&J and its subsidiary Scios promoted its heart failure drug, Natrecor, as a weekly treatment for patients, despite having no scientific evidence to support this approach.

It seems that these settlements are merely a “slap on the wrist” to such huge pharmaceutical giants, who can make that money back in no time.  Perhaps jail time or more aggressive sanctions will change the way they do business. They are endangering many lives for the sake of lining their pockets and more severe punishments need to be given.

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