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The Department of Justice Reaches One of the Largest Healthcare Fraud Settlements in US History

Today, the US Department of Justice revealed that Johnson & Johnson (J&J) and its subsidiaries have agreed to pay more than $2.2. billion to settle criminal and civil legal allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider.  Of the total settlement, the criminal fines and forfeiture total $485 million, while the civil settlement amounts to $1.72 billion.  DOJ representatives stated that this agreed-upon sum is one of the largest healthcare fraud settlements in US history.

According to the civil allegations brought under qui tam provisions of the False Claims Act, over the course of many years J&J and its subsidiary Janssen caused false claims to be submitted to the federal government and state governments by promoting prescription drugs for off-label uses not covered by healthcare programs, making false and misleading statements about the safety and efficacy of these medications, and paying kickbacks to physicians to prescribe J&J products to patients.

For example, Risperdal is a drug approved by the FDA solely for the purpose of treating schizophrenia.  Despite the fact that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading,” Janssen allegedly misbranded the drug as safe to treat psychotic symptoms and associated behaviors that were displayed by elderly patients suffering from dementia, not schizophrenia.  At the same time, J&J purportedly established a corporate goal to increase use of the antipsychotic Risperdal among children and adolescents, even though it knew that Risperdal posed certain health risks to children.

In addition, with the hope of increasing their drug market share among elderly patients, J&J and Janssen allegedly paid millions of dollars in kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients.  These kickbacks caused Omnicare to submit false claims to federal health care programs.  Similarly, J&J and another of its subsidiaries, Scios Inc., are alleged to have caused false and fraudulent claims to be submitted to federal health care programs as a result of off-label promotion for the heart failure drug Natrecor.

The cases referenced above are just a few of many civil lawsuits filed against J&J over the past decade.  These cases were brought under the False Claims Act.  The False Claims Act allows a private citizen (called the whistleblower or relator) to bring civil actions on behalf of the government and to share in any recovery.  Because whistleblowers perform a public service exposing government fraud, they can receive a significant monetary reward.  From the federal government’s share of the J&J civil settlements, relators from multiple U.S. federal courts will receive from $27.7 to $112 million.

If you have knowledge of a potential healthcare fraud case, you may be able to file your own whistleblower lawsuit.  When filing a lawsuit on behalf of the government, a qui tam law firm can protect your rights and help you partake in your share of the recovery.  If you would like to consult with an attorney, please fill out our Confidential Case Evaluation form, or call (202) 973-0900 to speak with a lawyer at the law office of Tycko & Zavareei LLP.