Johnson & Johnson pays $2.2 billion to settle drug fraud case with DOJ

Johnson & Johnson will pay more than $2.2 billion to settle accusations that the healthcare heavyweight and its subsidiaries engaged in far-reaching schemes involving illegal marketing and kickbacks, the Justice Department announced Monday.

The settlement, stemming from a decadelong investigation, is among the largest of its kind in U.S. history.

“These companies lined their pockets at the expense of the American taxpayers, patients and the private insurance industry,” Attorney General Eric Holder said.

Johnson & Johnson allegedly promoted drugs for uses not approved by the Food and Drug Administration. In one instance, Johnson & Johnson subsidiary Janssen Pharmaceuticals Inc. violated FDA regulations by illegally marketing the anti-schizophrenia drug Risperdal to treat non-schizophrenics, including elderly people suffering from dementia.

Johnson & Johnson and Janssen allegedly downplayed serious health risks associated with Risperdal, including the potential for stroke, and paid doctors to induce them to prescribe the drug.

As part of the scheme, the companies allegedly paid kickbacks to the country’s biggest long-term care pharmacy, which, in turn, recommended Risperdal for people suffering from Alzheimer’s disease, Holder said.

The plot resulted in taxpayer-funded government healthcare programs spending millions in false claims for the drugs.

The allegations unveiled Monday also include the anti-psychotic drug Invega and the heart drug Natrecor.

The companies have agreed to pay $400 million in criminal fines, $149 million to resolve the kickback claims and $1.2 billion to resolve their criminal liability under the False Claims Act.