Johnson & Johnson to Pay $2.2B to Settle Drug Marketing Allegations

It is the largest payout for misbranding and unapproved use in history, according to the U.S. Department of Justice. It is also the third largest settlement involving one company.

Johnson & Johnson will pay $1.673 billion of the $2.2 billion to resolve allegations of off-label marketing for Risperdal and Invega and allegations of paying kickbacks to physicians involved in Risperdal.

The resolution is the result of whistleblower lawsuits filed in Pennsylvania.

"This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud,” Attorney General Eric Holder said in a prepared statement.

Risperdal is a drug approved to treat the management and manifestation of psychotic disorders, and in March of 2002, its use was narrowed to the treatment of schizophrenia exclusively.

Johnson & Johnson subsidiary Jannsen Pharmaceuticals, based in Mercer County, N.J., pleaded guilty to a criminal complaint that it introduced a misbranded drug into interstate commerce between March 2002 and December 2003 by introducing the drug for a new, unapproved use. 

The company admitted it promoted the drug to health care providers for treatment of psychotic symptoms and associated disturbances exhibited by elderly, non-schizophrenic dementia patients, according to the Department of Justice.

Jannsen will pay $400 million, including a criminal fine of $334 million and the forfeiture of $66 million.

The civil complaint dealt with Jannsen’s marketing of the drug to control and treat behavioral disturbances and conduct disorders in the nation’s most vulnerable patients, an unapproved use.

Jannsen was also accused of marketing Invega, which was approved for schizophrenia, for conditions for which it was not approved. This lead to the submission of false claims to federal healthcare programs. They were also accused of making false claims about the safety and effectiveness of Risperdal and paying physicians to prescribe the drug.

Johnson & Johnson will pay $1.273 billion in civil penalties. It already paid $118 million to the state of Texas to settle similar accusations, bringing its total civil settlement to $1.391 billion.