In one of the largest healthcare fraud settlements in US history, Johnson & Johnson has pleaded guilty to introducing a misbranded drug and must pay approximately $2.2bn (€1.6bn) to resolve criminal and civil liability.
The problem stemming back to March 2002 saw Johnson & Johnson - through its subsidiaries Janssen and Scios - market its US Food and Drug Administration (FDA) approved schizophrenia drug Risperdal for the unapproved use of treating agitation associated with dementia in the elderly.
Yesterday, a settlement was finalised with the firm agreeing to pay a criminal fine of $485m and civil settlements of $1.72bn with the federal government and 45 states.
“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.”
Whilst the FDA allows physicians to use a drug to treat patients for symptoms or diseases even when the drug is not FDA-approved for such uses, a company misbranding a drug and promoting its product for such a use is a violation.
With Risperdal, the drug may increase risk of stroke in the elderly and, according to the FDA, J&J downplayed such ricks “by combining negative data with other studies in order to support a perception of decreased risk from using the drug.”
The company ignored warnings and a whistle blower complaint led to a criminal investigation led by the FDA. John Roth, Director of the FDA’s Office of Criminal Investigations said in a statement:
“Our investigators devoted considerable time and resources to this case, to help ensure that pharmaceutical companies do not mislead healthcare providers and the general public about the safety and efficacy of their medicines.”
For J&J, VP Michael Ullmann said yesterday: “Today we reached closure on complex legal matters spanning almost a decade.
“We remain committed to working with the U.S. Food and Drug Administration and others to ensure greater clarity around the guidance for pharmaceutical industry practices and standards.”
Rispersdal was at one stage J&J’s biggest selling drug clocking in $4.2bn of sales in 2006 , over 18 percent of the firm’s total pharma sales for the year. The firm lost exclusivity on the drug in 2007 and a number of generics are now available.