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Johnson & Johnson Will Pay $2.2 Billion to Settle U.S. Drug Investigation

Update Date: Nov 04, 2013 02:47 PM EST
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The Department of Justice announced today that Johnson & Johnson and its subsidiaries have decided to settle with the United States government by paying over $2.2 billion. The settlement will stop the U.S. government's investigation into both civil and criminal allegations against the company. Johnson & Johnson was under suspicion of promoting strong, anti-psychotic drugs to children, seniors and disabled people without approval. This is the third largest settlement payout involving a drug manufacturing company to occur in U.S. history.

According to some of the allegations, Johnson & Johnson and its subsidiaries were responsible for giving physicians and pharmacies money so that they would promote and prescribe the use of antipsychotics, Risperdal and Invega, and Natrecor to treat heart failure. The company had racked up $1.72 billion in civil settlements with the federal and state governments and another $485 million in criminal fines and forfeited profits, reported the Associated Press via ABC News.

"Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardize the public health, and take money out of taxpayers' pockets," said Attorney General Eric Holder.

The Johnson and Johnson subsidiary, Janssen Pharmaceuticals have admitted to coercing nursing home doctors and nurses to promote the use of Risperdal. The drug was recommended to treat erratic behavior in dementia patients between 2002 and 2003. Sale representatives during that time marketed Risperdal as a safe treatment for elderly patients who suffer from anxiety, agitation, hostility and depression. The sale representatives did not inform the nursing homes and doctors that the drug was only approved by the U.S. Food and Drug Administration (FDA) for schizophrenia. Risperdal has been tied to increasing the risk of stroke and death in elderly patients. In another civil complaint, the government believes that Janssen also promoted this antipsychotic as well as Invega for children and mentally disabled patients between 1999 and 2005.

While the company's subsidiaries were involved with manipulating nursing homes to use Risperdal, Johnson and Johnson was allegedly paying money to Omnicare, the country's largest long-term care pharmacy. Johnson & Johnson had paid Omnicare millions in grants and education funds in order to persuade the pharmacy and its consultant pharmacists to promote the use of Risperdal and other drugs from Johnson & Johnson.

Johnson and Johnson said in a statement, "This resolution allows us to move forward and continue to focus on delivering innovative solutions that improve and enhance the health and well-being of patients."

"Our investigators devoted considerable time and resources to this case, to help ensure that pharmaceutical companies do not mislead healthcare providers and the general public," John Roth, director of the FDA's Office of Criminal Investigations, said according to Reuters.

The government hopes that this case will dissuade other drug manufacturing companies from partaking in these illegal activities that jeopardize the health of Americans. 

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