In what is being described as one of the largest whistleblower payouts in the history of the United States, Johnson & Johnson agreed to pay $2.2 billion over the way in which the antipsychotic medication, Risperdal, was marketed, among other issues.
Under the agreement, whistleblowers in three states will be collecting $167.7 million under the False Claims Act, according to CNN. Charges involve marketing drugs for unapproved, off-label uses and paying kickbacks to doctors and nursing home facilities. Penalties include forfeiture and fines to the federal government and some states over Risperdal and Invega, both antipsychotics, and Natrecor, a heart failure medication, according to both J&J and Attorney General Eric Holder.
“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,’” the Justice Department said, CNN Money reports. Holder said incentives including kickbacks could have placed the “health of some patients at risk.”
The Justice Department said the settlement penalty is one of the largest health care-related settlements in the U.S. AG Holder said that J&J and two of its subsidiaries “lined their pockets at the expense of American taxpayers, patients and the private insurance industry,” according to CNN. The settlement ends about eight years of government probes and whistleblower lawsuits, FiercePharma reports.
Prior to this, Johnson & Johnson paid the state of Arkansas $1.2 billion in fines in 2011 over deceptive marketing and false claims violations concerning Risperdal. The case involved some 239,000 violations of the state’s False Claims Act, as well as 4,600 violations of the Deceptive Trade Practices Act, CNN previously reported. Also related to Risperdal, J&J settled claims in Texas over off-label marketing for $158 million, according to FiercePharma. The Arkansas award is under appeal.
Risperdal brought in over $24 billion globally from 2003 to 2010; $20 billion in the U.S. alone prior to its patent expiration in 2007. According to investigators, most of the revenue was the result of off-label sales, FiercePharma reports.
This weekâ€™s award will be divided among an unnamed number of whistleblowers, according to the Justice Department, CNN Money writes. Addressing state and federal charges in criminal and civil courts, the sum pays $112 million for whistleblowers in Pennsylvania, close to $28 million in Massachusetts, and $28 million in California, the Justice Department indicated. According to the FiercePharma report, the settlement will not affect J&Jâ€™s business with federal healthcare programs. J&Jâ€™s Janssen Pharmaceuticals Inc. unit will plead guilty to one misdemeanor violation of the Food Drug and Cosmetic Act; the settlement also covers allegations involving other J&J-manufactured drugs.
A former Scios employeeâ€”Scios is a unit of Johnson & Johnsonâ€”will receive the entire $28 million award in California. The man brought the lawsuit in 2005 and was involved in assisting government lawyers in the building of their case, which included preparing for depositions. He was employed by Scios for a nine-month period in 2003-2004, according to CNN.
This weekâ€™s announcement is “a great victory for whistleblowers,” said Stephen Kohn, executive director of the National Whistleblowers Center and author of The Whistleblower’s Handbook. Whistleblowers can be awarded 15-30 percent of the amount recovered in a case that they helped to bring, CNN Money explains.