Johnson & Johnson and its subsidiaries have agreed to pay over $2.2 billion to resolve criminal and civil allegations that the company promoted powerful psychiatric drugs for unapproved uses in children, seniors and disabled patients, the Department of Justice announced on Monday.
The allegations include paying kickbacks to physicians and pharmacies to recommend and prescribe Risperdal and Invega, both antipsychotic drugs, and Natrecor, which is used to treat heart failure.
The figure includes $1.72 billion in civil settlements with federal and state governments as well as $485 million in criminal fines and forfeited profits.
The agreement is the third-largest U.S. settlement involving a drugmaker, and the latest in a string of legal actions against drug companies that allegedly put profits ahead of patients. In recent years, the government has cracked down on the pharmaceutical industry's aggressive marketing tactics, which include pushing medicines for unapproved, or off-label, uses. While doctors are allowed to prescribe medicines for any use, drugmakers cannot promote them in any way that is not approved by FDA.
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"Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardize the public health, and take money out of taxpayers' pockets," said Attorney General Eric Holder, in prepared remarks at a news conference.
In its plea agreement, J&J subsidiary Janssen Pharmaceuticals admitted that it promoted Risperdal to nursing home doctors and nurses to control erratic behavior in seniors with dementia. That use is explicitly barred in the drug's warning label because of the risk of stroke and death in elderly patients. Antipsychotic drugs are known for their sedative effects and are occasionally used to treat post-traumatic stress and sleep disorders, though those uses have never been approved by the FDA.
In a separate civil complaint, the government alleged that J&J and Janssen also promoted the drug as a way to control behavioral problems in children and the mentally disabled. The drugmaker allegedly downplayed Risperdal's side effects while also paying kickbacks to the nation's largest long-term care pharmacy to recommend the drug to prescribers. The off-label prescribing of Risperdal contributed to millions of dollars in federal and state spending by health programs like Medicare, Medicaid and the Department of Veterans' Affairs.
"Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients and the private insurance industry," Holder said, adding that the company's alleged conduct "put at risk the health of some of the most vulnerable members of our society — including young children, the elderly and the disabled."
Both state and federal governments are spending more than ever on prescription drugs, as Medicare and Medicaid swell with aging baby boomers. That increased spending has attracted scrutiny from prosecutors looking to recover taxpayer dollars.
Last year British drugmaker GlaxoSmithKline paid a record $3 billion in fines to settle criminal and civil violations involving 10 of its drugs. In 2009, Eli Lilly & Co paid $1.42 billion to settle similar allegations that the company promoted its antipsychotics Zyprexa for seniors with dementia.