Improper Marketing of Medicine
Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil Investigations
Allegations Include Off-label Marketing and Kickbacks to Doctors and Pharmacists
WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
“When companies put profit over patients’ health and misuse taxpayer dollars, we demand accountability,” said Associate Attorney General Tony West. “In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants.”
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
“As patients and consumers, we have a right to rely upon the claims drug companies make about their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately. That is why this Administration has continued to pursue aggressively – with all of our available law enforcement tools -- those companies that corrupt our health care system.”
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen’s sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. The information alleges that the company created written sales aids for use by Janssen’s ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen’s guilty plea will not be final until accepted by the U.S. District Court.
The Federal Food, Drug, and Cosmetic Act (FDCA) protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bear true, complete and accurate information. Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for those specified uses. Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded. The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.
“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Director of the FDA’s Office of Criminal Investigations John Roth. “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health. The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”
J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients with the Drugs Risperdal and Invega for Off-Label Uses
In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation’s most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities. The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.
“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly and those with developmental disabilities,” said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger. “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”
In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.” The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”
The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events. A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that “[a]t this point, so long after [the study] has been completed … we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings.”
The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).” When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.” The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients.
In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities. The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect the drug’s market share with child/adolescent patients. Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.
In addition to allegations relating to Risperdal, today’s settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.
As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal. Because Medicaid is a joint federal-state program, J&J’s conduct caused losses to both the federal and state governments. The additional payment made by J&J as part of today’s settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million. The federal government and Texas each received $59 million from the Texas settlement.
Kickbacks to Nursing Home Pharmacies
The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants” and “educational funding.” These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes. Omnicare’s consultant pharmacists regularly reviewed nursing home patients’ medical charts and made recommendations to physicians on what drugs should be prescribed for those patients. Although consultant pharmacists purported to provide “independent” recommendations based on their clinical judgment, J&J viewed the pharmacists as an “extension of [J&J’s] sales force.”
J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs. The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million. In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.
“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”
Off-Label Promotion of the Heart Failure Drug Natrecor
The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity. This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.
In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure – a use not included in the FDA-approved label and not covered by federal health care programs. These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.
The government’s complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug. Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor. Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.
As part of today’s resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor. In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.
“This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence,” said First Assistant U.S. Attorney for the Northern District of California Brian Stretch. “We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”
Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and from those who have left the company. The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."
Coordinated Investigative Effort Spans Federal and State Law Enforcement
This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud. Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The criminal cases against Janssen and Scios were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division’s Consumer Protection Branch. The civil settlements were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division’s Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
This matter was investigated by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Office of Personnel Management’s Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service’s Office of the Inspector General and the FBI.
One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act. Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.
The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. From the federal government’s share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million. Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.
Court documents related to today’s settlement can be viewed online at www.justice.gov/opa/jj-pc-docs.html.
Source US Department of Justice
J&J's Marketing of Risperdal Violated Law, Arkansas Jury rules
Johnson & Johnson (JNJ) officials misled Arkansas doctors and patients about the risks of the antipsychotic drug Risperdal, and the company’s marketing campaign violated consumer-protection laws, a jury ruled.
Jurors in state court in Little Rock, Arkansas, deliberated about three hours yesterday before finding J&J and its Janssen unit engaged in “false or deceptive acts” by sending a 2003 letter touting Risperdal as safer than competing drugs to more than 6,000 doctors across the state. The state is seeking more than $1.25 billion in penalties over the Risperdal marketing campaign, and a judge will decide later whether to fine J&J.
It’s the third jury verdict against J&J, the second-biggest maker of health products, in cases where states alleged the drugmaker hid Risperdal’s risks and tricked Medicaid regulators into paying more than they should have for the medicine. Louisiana and South Carolina juries also found the company’s Risperdal marketing violated consumer-protection laws.
“Three losses in a row means the company needs to become more realistic about its exposure and come up with an exit strategy in the form a settlement,” Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia, said in a phone interview.
Teresa Mueller, a spokeswoman for J&J’s Janssen unit, said the drugmaker was disappointed with the Arkansas jury’s ruling.
“It is our position that an individual state should not penalize a pharmaceutical company for using an FDA-approved package insert or decide for itself whether a company complies with FDA rules,” Mueller said in an e-mailed statement.
‘Lied To Patients’ Arkansas Attorney General Dustin McDaniel said in an e- mailed statement that he filed the suit because he believed Arkansas residents deserved to be protected from “fraud and deceptive practices.”
He said that jurors found “Johnson & Johnson and Janssen Pharmaceuticals lied to patients and doctors because they cared more about profits than people.”
Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. The drug generated $3.4 billion in sales in 2008, or 5.4 percent of New Brunswick, New Jersey-based J&J’s revenue, according to company filings. Sales of the drug fell to $527 million in 2010, according to earnings reports.
Safer, Better Along with contending that J&J and Janssen defrauded the Medicaid program by failing to properly outline the antipsychotic medicine’s risks, Arkansas officials alleged J&J officials deceptively marketed the drug as safer and better than competing medicines.
The state also argued the companies marketed the drug for “unapproved uses, including various symptoms in children and the elderly” after being warned by federal authorities to halt such sales.
The U.S. has been investigating Risperdal sales practices since 2004, including allegations that the company marketed the drug for unapproved uses, J&J executives said in a U.S. Securities and Exchange Commission filing last year.
The U.S. Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys general, people familiar with the settlement talks said this month.
Side Effects Arkansas officials asked jurors to find J&J’s Risperdal marketing campaign violated the state’s deceptive-trade practices law by making false and deceptive statements about the drug in the letter to doctors.
They also argued J&J and Janssen executives made false statements about the drug’s diabetes risks and other side effects in its warning label
The state will now ask Judge Tim Fox to fine J&J at least $5,000 for each prescription affected by the Risperdal marketing campaign. Arkansas said at least 250,000 prescriptions may have resulted from illegal marketing. That would amount to a fine of at least $1.25 billion.
The state said it also will seek damages over the misleading statements in the so-called “Dear Doctor” marketing letter the company sent to Arkansas doctors in 2003.
Arkansas officials also will also seek penalties for more than 19,000 sales calls in which J&J representatives allegedly used the letter or made other deceptive statements about the drug.
Public Funds Fox said he’d hear arguments today about the state’s requests for penalties, but didn’t say whether he’d issue his ruling at that time. “Let’s get this matter resolved,” he told lawyers for both sides after the jury verdict.
J&J and Janssen have been sued by 11 states seeking reimbursement for Medicaid or other public funds paid on Risperdal prescriptions. The lawsuits allege that J&J promoted the drug for dementia, mood and anxiety disorders and other unapproved uses, or downplayed risks.
In June 2010, a judge threw out Pennsylvania’s suit over the Risperdal marketing campaign in the middle of a trial. An appeal of that ruling is set to be heard next month.
Four months later, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials for making misleading claims about the drug’s safety. J&J has appealed.
In June 2011 a South Carolina judge ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. The company has appealed that ruling. J&J ended the most recent trial in Texas with a $158 million settlement in January.
The case is State of Arkansas v. Ortho-McNeil-Janssen Pharmaceuticals Inc., CV07-15345, Pulaski County Circuit Court (Little Rock) Arkansas.
Source : Bloomberg
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Abbott Laboratories sets aside 1.5 Billion USD for a potential off-label marketing settlement
Abbott Laboratories ($ABT) has set aside $1.5 billion for a potential off-label marketing settlement with the U.S. Justice Department. Amid all the excitement about Abbott Laboratories' impending split into two companies, the legal charge hasn't attracted much attention. But if it does amount to $1.5 billion, it would rank as the second-biggest off-label settlement in history, outranked only by Pfizer's ($PFE) $2.3 billion deal.
The potential deal would resolve a longstanding investigation into Abbott's Depakote promotions and wrap up negotiations that have been going on at least since the spring. The Justice Department disclosed in court documents this June it was in active talks with Abbott to wrap up the Depakote probe.
Whistleblower lawsuits joined by the feds allege Abbott pushed the epilepsy drug, which is also approved for bipolar mania and migraine prevention, for a variety of unapproved uses. The company touted Depakote as a treatment for autism, sexual compulsions, agitated and aggressive dementia patients, and other conditions, the whistleblowers claim. The unapproved uses were promoted in a variety of U.S. healthcare settings, including long-term care and assisted-living facilities.
Although off-label marketing settlements have become commonplace in the drug industry, recent deals have been comparatively small. Johnson & Johnson ($JNJ) recently agreed to pay $81 million to wrap up a Risperdal marketing probe. But a series of large settlements came down in 2008, 2009 and early 2010, including Pfizer's $2.3 billion settlement of claims that it promoted Bextra and several other drugs for unapproved uses. Eli Lilly's ($LLY) $1.4 billion Zyprexa settlement currently stands as the second-biggest, with Allergan's ($AGN) $600 million Botox settlement in third place and AstraZeneca's ($AZN) $520 million Seroquel settlement in fourth.
Source : FiercePharma
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Jury To Hear $1Bln. Lawsuit Against J&J Unit
A jury is set to hear claims against Janssen L.P., an unit of healthcare major Johnson & Johnson (JNJ: News ), on charges that the drugmaker used false marketing tactics to persuade the state's Medicaid officials to spend millions on its schizophrenia drug Risperdal. The suit, brought by the State of Texas and plaintiff Allen Jones, is currently set for June 21.
The company's total exposure in the anticipated jury trial, currently exceeds $1 billion in damages and other liabilities.
The lawsuit dates back to 2004, following evidence uncovered by Allen Jones during his work as an investigator with the Pennsylvania Inspector General's Office. The suit alleges Janssen to have misled Medicaid officials to give preference to Risperdal over other companies' medications, even though there wasn't any difference in the drug's efficacy. Risperdal was also exorbitantly priced compared to competitors, the complaint says.
The suit also accuses Janssen of having recommended the usage of the antipsychotic drug on children, even though it was only approved to treat adult schizophrenic patients.
The ground for the hearing of the claims follows a ruling late Thursday by a Texas District Court judge that favored the process, following summary judgment motions filed by the State of Texas and Janssen.
In the order, the court ruled against Janssen on two motions that would have closed the case, while the state of Texas had three summary judgment motions in its favor.
New Jersey-based Janssen focuses on mental health and offers prescription medications for the treatment of schizophrenia, autistic disorder, among others.
Schizophrenia affects 1 in 100 Americans, and is often characterized by inability to distinguish reality, think logically and behave normally in social settings. The market for the disorder is huge. In fiscal 2010, worldwide sales of Risperdal/Risperidone was $527 million, sharply down by 41.4 percent from last year. Meanwhile, the company's injection therapy Risperdal Consta saw a 5.3 percent climb in sales at $1.5 billion.
Johnson & Johnson has been facing product recalls and manufacturing shutdowns, which reduced sales by about $900 million last year as the company recalled 40 consumer products - mainly related to over-the-counter childcare medicines and Tylenol pain pills.
JNJ closed Friday's regular trade at $61.06, up $0.01 or 0.02%, on a volume of 11.4 million shares on the NYSE.
Source : RTT News (March 2011)
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J&J in court over mis-marketing 'dangerous' antipsychotic drug
The state of Arkansas is taking legal proceedings against a subsidiary of 'big pharma' company Johnson and Johnson over the marketing of an antipsychotic drug. The state claims that the drug's side effects were suppressed. A subsidiary company of drugs giant Johnson and Johnson, called Janssen Pharmaceuticals Inc., allegedly improperly marketed an antipsychotic drug and misled doctors about the potential side effects of the medicine, according to a lawyer representing the state of Arkansas. According to ABC News, the state of Arkansas is seeking the drugs company to be fined for each of the 250,000 Risperdal prescriptions issued to the state's Medicaid publicly. If the state is successful the court's award could range from $1.25 billion to $2.5 billion. All money would go into the Medicaid fund. The side effects in question relate to diabetes and hormonal imbalance. The action is being taken under violated Arkansas' Medicaid Fraud False Claims Act. The state claims that not only did the drugs company not publicise the side effects in its marketing information, it also misled doctors in a letter about the drug's risks. Evidence from medical practitioners in Arkansas indicates that the drug caused deaths among elderly users and breast growth and lactation in young boys. Bloomberg quotes the attorney for Arkansas saying "By the time this case is over, we will prove to you that Janssen lied about Risperdal’s dangers just to make money." Janssen, through their legal team, are refuting both claims. James Simpson, a lawyer for Janssen said "The state will not present any evidence that a single person was injured while taking Risperdal,” Simpson said in his opening statement. “There will not be any evidence that the state of Arkansas lost a penny in paying for Risperdal for thousands of Arkansas citizens who needed the drug." However, as PhillyPharma has reported, earlier in March 2012 a Texas judge Tuesday approved a $158 million settlement between Johnson & Johnson and the state of Texas over allegations that J&J's Janssen subsidiary illegally promoted Risperdal through the Medicaid program. Risperdal was introduced in 1994 as a "second-generation" antipsychotic drug and was a successful revenue generating product for Janssen. The drug is is used to treat schizophrenia, bipolar disorder and irritability in autism patients.
Source : Digital Journal
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Government nixes tentative $1 billion settlement with J&J: WSJ
Federal prosecutors in Washington, D.C. have nixed a tentative $1 billion settlement with Johnson & Johnson, holding out for a bigger settlement with the drugmaker for alleged improper marketing of its Risperdal schizophrenia drug, the Wall Street Journal said.
The report, citing sources familiar with the situation, said Department of Justice prosecutors in Washington rejected a proposed settlement worked out about two months ago between J&J and federal prosecutors in Philadelphia, and that the deal must now be renegotiated.
Officials in the Justice Department's criminal division could not be reached immediately for comment. J&J declined to comment.
The Department of Justice for years has been investigating the diversified healthcare company for alleged marketing of the anti-psychotic drug for unapproved uses, including for nursing home residents.
Individual states are also pressing similar allegations against J&J. The company in January said it will pay $158 million to settle a Texas lawsuit that accused it of improperly selling the drug to state residents on the Medicaid health program for the poor, including children.
That settlement fully resolved claims in Texas, J&J said, but does not affect other ongoing state or federal Risperdal litigation.
Source : Reuters
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Irish Drug Maker Settles Charges of Improper Marketing
By DUFF WILSON Published: December 15, 2010
The Irish pharmaceutical company Elan has agreed to pay $203.5 million to resolve criminal and civil complaints that it improperly marketed the antiseizure medicine Zonegran for weight loss and mood stabilization, the Justice Department said on Wednesday.
Elan had disclosed in July that it was setting aside $206.3 million to resolve the investigation. The payment included a $97 million criminal fine.
The Japanese drug maker Eisai also agreed to pay $11 million to resolve a civil case for off-label marketing of Zonegran after it bought rights to the drug from Elan in 2004, federal prosecutors said. The agreement with Eisai in June was revealed Wednesday when the Elan case was partly unsealed.
The cases rose from a 2004 whistle-blower filing by Dr. Lee R. Chartock, a Massachusetts psychiatrist who said he had been courted by Elan, sent to a conference and asked to prescribe the drug for weight loss. Dr. Chartock will receive more than $10 million from the civil payment as a reward to encourage people to report illegal activity, the government said.
Approved drugs can be used by doctors for any purpose they see fit, but it is illegal for companies to market the drugs for purposes other than the ones approved by the Food and Drug Administration.
Robert M. Thomas Jr., a Boston lawyer and co-counsel for Dr. Chartock, said the drug industry had tried to ignore marketing abuses. “Even companies that are serious about compliance usually still have sales forces that are compensated based on the volume of drugs sold,” he said in an interview Wednesday. “It doesn’t take long for salespeople and their supervisors to figure out creative ways to hit higher numbers. The problem is those are achieved by off-label marketing.”
Elan and Eisai are the latest in a string of drug companies over the last five years to settle cases involving what federal prosecutors contend are off-label marketing violations of the federal False Claims Act, which bars companies from causing improper billings to government programs, like Medicare and Medicaid.
Elan Pharmaceuticals, a United States subsidiary of Elan, is pleading guilty to a misdemeanor charge of misbranding in violation of the federal Food, Drug and Cosmetics Act. There was no criminal case against Eisai.
John B. Moriarty Jr., senior vice president and general counsel of Elan, said the company was pleased to reach the agreement and was committed to high ethical and legal standards.
Source : New York Times
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