The Inside Story of How Risperdal Whistleblowers Made Millions

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To prove claims made by former Johnson & Johnson sales representative, Judy Doetterl, United States prosecutors outfitted the former rep with a hidden recording device.

Doetterl was sent out to tape marketing presentations at one of Johnson & Johnson’s national sales meetings. “I was concerned that I would be found out accidentally and someone would see me go into a room to meet the agent,” Doetterl said. “I had to change battery packs every four hours. I knew in the end I was doing the right thing. They needed to know what was going on,” Doetterl told Bloomberg.com.

The U.S. accused Johnson & Johnson of marketing Risperdal and two other drugs off-label, paying kickbacks to doctors and pharmacists to increase the drugs’ sales, according to Bloomberg.com. Johnson & Johnson’s Janssen unit ultimately pleaded guilty to misbranding Risperdal, settling civil lawsuits that were filed under the False Claims Act. The Act enables citizens to file sealed complaints on behalf of the U.S. government, sharing in recovery amounts.

It took nine additional years of investigating Risperdal for Johnson & Johnson to agree to pay $2.2 billion to resolve the criminal and civil probes, according to Bloomberg.com. The agreement was made on November 4th. Eight Johnson & Johnson whistleblowers made more than $20 million each. Doetterl and four former employees filed the cases and will each receive about $29 million each from the federal government and state governments that claim that, due to the drug makers’ actions, they overpaid through Medicare or Medicaid for the drugs.

Allen Jones, a sixth whistleblower, received $20.3 million in 2012 when Johnson & Johnson paid $158 million to settle with the state of Texas over Risperdal, according to Bloomberg.com. Another two whistleblowers—Joseph Strom and Bernard Lisitza—also received millions for their cases. Strom sued over the way in which the drug, Natrecor, was marketed; Lisitza alleged kickbacks to Omnicare Inc., a nursing home pharmacy. The men will receive about $28 million each.

As part of the civil case, the federal government claimed that, from 1999 to 2005, Johnson & Johnson touted Risperdal for the elderly and for children—uses that, at that time, had not been cleared by the U.S. Food and Drug Administration, namely, schizophrenia and bipolar disorder. The drug maker advertised that Risperdal was safe and efficacious for off-label uses despite that research revealed the drug increased stroke risks in the elderly and diabetes for all people taking the antipsychotic, according to the federal government. The lawsuit allegations include that Medicare and Medicaid overpaid for the drug based on the drug maker’s practices, Bloomberg.com wrote.

Doetterl said that she promoted Risperdal for approved uses to psychiatrists prior to moving to the firm’s Buffalo, New York, ElderCare division, where she was urged by the firm to sell Risperdal for dementia. The process involved a compensation reward plan involving this type of off-label sales, according to Doetterl. In fact, sales of Risperdal comprised 70 percent of bonuses; 30 percent went to an Alzheimer’s treatment, according to Bloomberg.com.

“I would sit there and think, ‘How could the world’s largest health-care company have a whole sales force selling for dementia?” Doetterl told Bloomberg.com. “How could they get away with that?” She complained to a manager who told her, “‘What are you saying? You can’t do your job?’ I took it to her manager, and it was kind of blown off. I felt betrayed. They were so big and powerful that there was an arrogance that they could do no wrong and do whatever they wanted.”

In 2010, regional business director, Kurtis J. Barry, who was responsible for six managers, worked for Johnson & Johnson from 1996 to 2009 as the Risperdal product director, according to Bloomberg.com. He provided even more detailed evidence on Johnson & Johnson’s tactics and corporate strategies. “The decision to market, promote and sell Risperdal for off-label purposes to the elderly population was made affirmatively and deliberately by defendants’ executive and management personnel, and carried out under their authority and direction,” Barry claimed in his lawsuit, Bloomberg.com reported.

Barry’s as a whistleblower was “critical,” said Assistant U.S. Attorney Charlene Fullmer. “At that point, we had testimony from that product director that this was a marketing plan orchestrated at the highest levels of the company, and that message was passed onto the sales reps to persuade doctors to prescribe the drug off-label,” Fullmer said, according to Bloomberg.com.