July 31, 2012

Here We Go Again — Johnson & Johnson to Pay Upwards of $2.2 Billion to Settle Civil and Criminal Charges

By Jason Enzler

Only a few weeks after GlaxoSmithKline’s blockbuster $3 billion settlement over its healthcare fraud misdeeds relating to Paxil, Wellbutrin and Avandia, Johnson & Johnson is joining the party with a multi-billion dollar settlement of its own.   Though it has yet to be finalized, the Wall Street Journal reported that Johnson & Johnson and the DOJ have reached an agreement requiring the company to pay up to $2.2 billion to settle charges that it improperly promoted its drugs.  The agreement apparently includes a $400 million criminal fine for the company’s efforts to illegally promote Risperdal, an antipsychotic drug, for unapproved uses.  This impending settlement follows on the heels of a number of hefty jury awards against the company, including a $1.2 billion award in Arkansas for its Risperdal misconduct.

The DOJ had previously rejected as too low a $1 billion offer by Johnson & Johnson to settle the government’s charges relating to Risperdal.  The DOJ wanted more money and more of the company’s pharmaceutical mischief addressed.  The  soon-to-be-inked agreement thus goes beyond Risperdal, settling charges of improper promotion of other Johnson & Johnson drugs and that the company paid millions of dollars in kickbacks to nursing-home pharmaceutical provider Omnicare to increase sales of Johnson & Johnson drugs to nursing home patients.  In 2009, Omnicare agreed to pay $98 million to settle charges against it for participating in kickback schemes.

While the DOJ and Johnson & Johnson have declined to comment, the press has reported that the deal likely will be announced in the upcoming weeks.  The agreement is designed to settle charges of violations of both federal and state antifraud laws.  The total amount that the company will pay under the settlement depends on how many states agree to the terms of the settlement.  When combined with the recent Glaxo settlement and the $1.5 billion settlement in May with Abbott Labs relating to Depakote, 2012 is shaping up to be a banner year for healthcare fraud recoveries, trampling the prior record year of 2011.  And once again, it has been whistleblowers who have led the charge in this newly invigorated government enforcement of the healthcare industry.

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