AG Gansler Secures Settlement from Johnson & Johnson and Subsidiary Over Fraudulent Marketing of Antipsychotic Drugs
Maryland to recover more than $20 million from $1.2 billion agreement
Baltimore, MD (Nov. 4, 2013) - Attorney General Douglas F. Gansler announced today that Maryland, joined by multiple states and the federal government, has secured a settlement with Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, Inc., to resolve civil and criminal allegations of unlawful marketing practices to promote the sales of their atypical antipsychotic drugs, Risperdal and Invega. The two companies will pay more than $1.2 billion to the states and the federal government with the Maryland Medicaid Program receiving $20.7 million, a portion of which will be paid to the federal government, which jointly funds the program.
"This marketing fraud and kickback scheme put vulnerable Maryland patients at risk while taxpayers were being ripped off," said Attorney General Gansler. "It's inexcusable that young children and seniors were among the vulnerable patient populations targeted by these illicit schemes."
In addition to the monetary penalty, Janssen Pharmaceuticals will plead guilty in federal court to a criminal misdemeanor charge of misbranding Risperdal in violation of the Food, Drug, and Cosmetic Act. As part of the criminal plea, Janssen has agreed to pay an additional $400 million in criminal fines and forfeitures.
The settlement resolves allegations that Johnson & Johnson and Janssen promoted, marketed, and introduced Risperdal and Invega into interstate commerce for uses that were not approved by the Food and Drug Administration (FDA) and for uses that were not medically indicated. The states contend that during the period of January 1, 1999 through December 31, 2005, the companies promoted Risperdal for off-label uses and made false and misleading statements about the safety and efficacy of Risperdal. Additionally, both companies paid illegal kickbacks to health care professionals and long-term care pharmacy providers to persuade them to promote or prescribe Risperdal to children, adolescents, and the elderly when there was no FDA approval for Risperdal use in these patient populations.
The states further contend that from January 1, 2007 through December 31, 2009, the companies promoted Invega for off-label uses and made false and misleading statements about the safety and efficacy of the drug.
Once the FDA approves a drug as safe and effective, a manufacturer cannot market or promote a drug for an "off-label" use - meaning any use not specified in the FDA-approved product label. The manufacturers' conduct caused false and/or fraudulent claims to be submitted to government-funded health care programs, including state Medicaid programs.
As part of the global resolution, the companies will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor their future marketing practices.
A team from the National Association of Medicaid Fraud Control Units worked closely with the federal government on the investigation and conducted the settlement negotiations with the pharmaceutical manufacturers on behalf of the states.
In making the announcement, Attorney General Gansler thanked Medicaid Fraud Control Unit Deputy Director Shelly Marie Martin and Medicaid Fraud Control Unit Chief Auditor Ruth Jarrell for their work on this case.