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J&J pays $2bn to settle Risperdal mis-selling claims

Concludes nine-year investigation into marketing activities

Risperdal - Johnson & Johnson

A nine-year investigation into alleged fraudulent marketing of Johnson & Johnson's schizophrenia drug Risperdal has ended with the pharma giant agreeing to pay $2bn to settle the case.

The US Department of Justice said yesterday that J&J, and subsidiaries Janssen and Scios, agreed to the payments - which include $400m in criminal fines - to "resolve criminal and civil claims that they marketed prescription drugs for uses that were never approved as safe and effective".

In addition to Risperdal, the probe also looked into mis-selling allegations for Risperdal follow-up Invega (paliperidone) and Natrecor (nesiritide), a drug for congestive heart failure (CHF). J&J said the claims related to promotional practices between 1994 and 2005.

Attorney General Eric Holder told a press conference yesterday that the investigation also suggested the companies "paid kickbacks to both physicians and pharmacies for prescribing and promoting these drugs".

The case centred on the promotion of Risperdal and Invega for unapproved uses, including use in elderly dementia patients who did not have schizophrenia, children and disabled people. It also involved Omnicare - the US's largest nursing home pharmacy - which agreed separately to a $98m settlement in 2009.

Natrecor was promoted for off-label uses "without credible scientific evidence", claims the DoJ, which notes that Scios pleaded guilty to misbranding the drug and paid an $85m criminal fine in 2009.

Off-label prescribing of medicines by doctors is not illegal, but it does constitute an offence to deliberately promote or distribute a drug for unapproved purposes under US regulations.

In return for the settlement, J&J will plead guilty to a single misdemeanour violation, saying in a statement that "Janssen accepts accountability for the actions described in the misdemeanour plea".

Escalating frustration with pharma marketing

The latest case marks a continuing escalation in the size of settlements sought by the DoJ as it becomes increasingly frustrated with the pharma industry's marketing practices in recent years.

Merck & Co was fined almost $1bn in 2011 for mis-selling arthritis treatment Vioxx, while Abbott Laboratories had to pay $1.6bn last year in a case involving epilepsy therapy Depakote and GlaxoSmithKline stumped up $3bn for off-label promotion of a number of drugs.

Novartis is also in the firing line, with the DoJ currently investigating marketing practices for various drugs, including immunosuppressant Myfortic over a 10-year period. In 2010 Novartis paid $422m to settle allegations that it marketed the epilepsy drug Trileptal.

Attorney General Holder told reporters yesterday that in the latest case, J&J and its subsidiaries "lined their pockets at the expense of American taxpayers, patients, and the private insurance industry". 

"They drove up costs for everyone in the health care system and negatively impacted the long-term solvency of essential health care programmes like Medicare," he added.

Article by
Phil Taylor

5th November 2013

From: Sales, Regulatory



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