Johnson and Johnson Puts $600 Million Aside for Settlements

Johnson & Johnson has earmarked $600 million to cover a possible settlement of lawsuits claiming that it paid kickbacks to Omnicare to buy more of certain drugs. According to the New York Times, it has been alleged through 2010 whistleblower lawsuits that pharmaceutical giant J&J made payments the pharmacy operator to buy more of its schizophrenia drugs Risperdal and Invega, as well as the respiratory drug, Natrecor. In addition, lawsuits by multiple states are alleging that the drugs were marketed for uses unapproved by the U.S. Food and Drug Administration (FDA).

There are multiple methods that manufacturers use to improperly market drugs.

J&J has reportedly agreed to pay up to $2.2 billion in a settlement of the lawsuits, including a criminal penalty portion as high as $600 million, which it has just set aside. The government says the payments to Omnicare, Inc. were made between 1999 through 2004. Omnicare provides drugs for hospitals, nursing homes, and other long-term care facilities. Multiple lawsuits from states claim that J&J illegally marketed Risperdal for patients and conditions for which it was not approved by U.S. regulators. It has been alleged that J&J used fraudulent tactics to deceive doctors into thinking that it was better than other rival medicines and that it was save for unapproved used for the young and the elderly.

Though the FDA only approves drugs for certain uses, pharmaceutical companies are sometimes found to be marketing and prescribing certain medication for off-label uses. According to one FDA Symposium report, up to 60% of prescriptions written in the U.S. are for off-label uses. There are multiple methods that manufacturers use to improperly market drugs. These are often prescriber-related (kickbacks, illegitimate research, free samples), business-related (meetings, seminars, marketing materials, sales reps), payer-related (where manufacturers tried to get reimbursed by insurance companies for off-label prescriptions), and consumer-related (sometimes seeking out patients that could be given the drug for off-label uses).

While the actual practice of doctors is not regulated by the FDA and they may prescribe any approved drug for any use, drug manufacturers are not permitted to market their drugs for unapproved uses. The use of drugs for off-market uses can have disastrous effects on some patients, as the medicine has not been tested extensively for that use and for that specific type of patient. Risperdal has been prescribed off-label for conditions such as dementia, Attention Deficit Disorder (ADD) and Attention Deficit Hyperactivity Disorder (ADHD), autism, depression, and anxiety, but it has been linked to the dangerous hyperglycemia.