- AAP
- November 05, 2013 9:04AM
Johnson & Johnson will pay $2.2 billion to settle an investigation over improper marketing of drugs.
HEALTH care giant Johnson & Johnson agreed Monday to plead guilty to criminal charges and pay $2.2 billion to settle allegations that it illegally promoted the use of its antipsychotic drugs for unapproved uses, including for children and the elderly.
The scheme, according to the U.S. Department of Justice, included payments to doctors to write prescriptions for unintended uses, sometimes for at-risk children in foster homes, and kickbacks to a pharmacy company that served elderly patients suffering from dementia in nursing homes.
The announcement was made in the US on Monday morning.
Attorney’s Office in Philadelphia played a key role in the investigation, which focused on the misuse of drugs such as Risperdal and Invega that were approved mainly for the small population of patients suffering from schizophrenia. Such drugs were promoted for other medical problems to increase sales.
In 2012, GlaxoSmithKline agreed to plead guilty to three criminal counts and pay $3 billion to settle allegations of illegal marketing of drugs and for withholding safety information about its diabetic drug Avandia.
Monday’s agreement involved criminal and civil charges and whistleblower lawsuits related to Risperdal, Invega and several other drugs. In 2009, Kentucky-based Omnicare Inc., agreed to pay $98 million to settle civil claims by the Justice Department and several states that it took kickbacks from J & J.
The deal comes nearly 10 years after federal investigators first issued a subpoena to J & J regarding Risperdal.
J & J is based in New Brunswick, N.J., and has multiple divisions operating in Pennsylvania, where it employs more than 7,000 people. The company is known for iconic consumer products such as Band-Aids and baby shampoo, but prescription pharmaceuticals are big moneymakers for J & J.
In more than a decade, few drugs have been as lucrative as Risperdal, first in pill form and later as a long-acting injectable called Risperdal Consta.
The high-water mark for Risperdal products was 2007, when the pill version generated $3.4 billion in sales and the injectable brought in $1.1 billion, according to J & J financial reports filed with the Securities and Exchange Commission. That represented more than 18 per cent of J & J’s nearly $25 billion in pharmaceutical sales for 2007.
Risperdal’s chemical name is risperidone. The pill version completely lost patent protection in the U.S. in 2008, has several generic competitors, and is no longer promoted by J & J. The company’s injectable, Risperdal Consta, and the two versions of Invega generated $2.8 billion for all of 2012, and $2.3 billion through the first nine months of 2013.
Alex Gorsky was promoted to chief executive officer of J & J in April 2012, in part because of his record of generating sales as leader of Janssen Pharmaceuticals, which is J & J’s prescription drug unit and the maker of Risperdal.
Part of J & J’s legal strategy is fighting hard to keep Gorsky from having to take the stand in any trial.
J & J said in its second-quarter SEC filing that as of June 30, 2013, there were approximately 490 individual lawsuits pending in the U.S. with respect to Risperdal. In the same SEC report, the company noted it had 29,900 other pending lawsuits related to other products, the two largest groups being pelvic mesh implants (12,250) and artificial hips (11,500).
