For Immediate Release - November 04, 2013

Johnson & Johnson to Pay $62.5 Million to MassHealth and to Benefit Consumers Over Illegally Marketing Antipsychotic Drugs

Pharmaceutical Giant Will Pay Up To $1.75 Billion to Federal and State Authorities under Civil Settlements

BOSTON – Pharmaceutical giant Johnson & Johnson has agreed to pay $62.5 million to benefit Massachusetts and its health care consumers in three separate agreements that resolve allegations the company engaged in various illegal schemes related to the marketing of the antipsychotic drugs Risperdal and Invega, Attorney General Martha Coakley announced today. 

The separate agreements reached today include the following payments to Massachusetts:

  • $39 million: A national multi-state settlement with the United States Department of Justice (DOJ) for alleged off-label marketing schemes to promote the drugs and pay kickbacks to medical professionals.
  • $8 million: A five-state settlement with DOJ for alleged kickbacks to a pharmacy provider in order to encourage patients to switch to Johnson & Johnson drugs, including Risperdal, for treatment.
  • $15.1 million: After the AG’s Office filed a complaint in 2011, Massachusetts reached a consent judgment with Janssen Pharmaceuticals, Inc., a subsidiary of Johnson & Johnson, for violations of consumer protection laws in promoting Risperdal.

“Today’s settlements demonstrate our office’s commitment to pursue pharmaceutical companies that defraud our Medicaid system by promoting uses of their products that have not been established to be safe and effective,” AG Coakley said. “Illegal marketing puts patient safety at serious risk and diverts scarce health care dollars from the care and treatment of our most vulnerable citizens.”

National Settlement  

As part of the national settlement with the DOJ, the District of Columbia and 40 states, Johnson & Johnson will pay a total of $1.2 billion to federal and state authorities to resolve allegations that the company engaged in illegal off-label marketing schemes. It was also alleged that the company offered kickbacks to medical professionals to increase prescribing of Risperdal and Invega for patients with Alzheimer’s disease, dementia, conduct disorders, depression, and anxiety.  

The U.S. Food, Drug and Cosmetic Act prohibits pharmaceutical manufacturers from promoting off-label uses of their products, although physicians may prescribe drugs for those uses. Under the agreement, Johnson & Johnson will pay more than $39 million to the Massachusetts Medicaid program (MassHealth).

As part of this off-label marketing settlement, Janssen has agreed to plead guilty to a misdemeanor violation of the U.S. Food, Drug & Cosmetic Act and to pay a criminal fine of $400 million.

Five-State Settlement

Johnson & Johnson will also pay $149 million to settle allegations that it paid kickbacks so that long-term care pharmacy provider Omnicare would switch nursing home patients to certain Johnson & Johnson drugs, Risperdal among them, for off-label treatment of various conditions, including behavioral symptoms associated with Alzheimer’s disease and dementia.

The lawsuit, filed in U.S. District Court in Boston, was joined by Massachusetts, California, Indiana, Kentucky, Virginia and the federal government. Under the conditions of today’s settlement, MassHealth will receive $8 million.

Massachusetts’ Consumer Protection Lawsuit

The AG’s Office filed a separate consent judgment today in Suffolk Superior Court, resolving a lawsuit brought in August 2011.

The complaint alleged that Janssen violated the Massachusetts Consumer Protection Act by promoting Risperdal to treat elderly dementia and a number of conditions in children and adolescents when the uses were not shown to be safe and effective or approved by the FDA. Janssen also allegedly down-played the serious side effects of the drug, including diabetes. The consent judgment imposes restrictions on how Janssen promotes and markets its atypical antipsychotic drugs.  

Under the terms of this consent judgment, Janssen will pay the Commonwealth an additional $15.1 million. The Massachusetts Department of Public Health (DPH) will receive $2 million for grant programs designed to reduce the inappropriate use of antipsychotic medications in nursing homes, and the Commonwealth’s general fund will receive $3.5 million. The remaining balance will be used by the AG’s Office to fund efforts to improve care and treatment related to mental health, elderly dementia, and/or diabetes, and other programs to benefit health care consumers in Massachusetts. 

The Massachusetts consumer protection litigation and settlement were handled by Assistant Attorneys General Eric Gold, Wendoly Langlois and Emiliano Mazlen, with assistance from legal analyst Kathryn Doty and Division Chief Thomas O’Brien, all of the AG’s Health Care Division.

The federal and multi-state settlements today are the result of investigations conducted by the U.S. Attorney’s Offices for the District of Massachusetts and the Eastern District of Pennsylvania, the Civil Frauds Division of the U.S. Department of Justice, and a team of Assistant Attorneys General, data analysts and investigators from several states, including Massachusetts. Assistant Attorney General Robert Patten of AG Coakley’s Medicaid Fraud Division served as one of the principal negotiators on behalf of the states in connection with both settlements. He was assisted by Assistant Attorneys General Jennifer Goldstein and Jay Pina, Data Analysts Anthony Megathlin and Steve Devlin, and Investigator Jessica Roy, all of AG Coakley’s Medicaid Fraud Division. 

Since 2007, the Medicaid Fraud Division of Attorney General Coakley’s Office has realized more than $350 million in civil recoveries for MassHealth.  The Massachusetts False Claims Act (MFCA) authorizes the AG’s Office to investigate individuals and entities suspected of causing or submitting false claims to the Commonwealth, and to bring civil actions to recover treble damages, civil penalties of up to $11,000 per violation, investigation costs and attorneys’ fees.  Recent amendments to the MFCA, drafted and submitted to the legislature by AG Coakley’s office, have strengthened the Commonwealth’s ability to pursue and hold accountable those who cause or submit false or fraudulent claims to the government. These amendments ensure that the MFCA remains compliant with the incentive provisions of the Social Security Act, which have resulted in the return of more than $33 million in additional state Medicaid dollars to Massachusetts over the past seven years.   

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