Johnson & Johnson settlement produces record whistleblower award

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Whistleblowers in three states will share in an award of $167.7 million resulting from a $2.2 billion settlement of criminal and civil complaints filed against Johnson & Johnson by the federal government.  In addition, a Johnson & Johnson subsidiary will plead guilty to a misdemeanor misbranding charge.  Several states as well as the federal government will receive payments from the settlement.

The government charged that J& J and subsidiaries improperly promoted Risperdal and other antipsychotics for unapproved uses and paid  “kickbacks” to doctors and nursing homes. In 2005 alone, global sales of Risperdal exceeded $3.5 billion.

Zane Memeger, U.S. Attorney for the Eastern District of Pennsylvania, said “J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society — children, the elderly and those with developmental disabilities.”

“These companies lined their pockets at the expense of American taxpayers, patients and the private insurance industry” as they drove up health care costs and hurt the solvency of health care programs such as Medicare,” said U.S. Attorney General Eric Holder.

Previously, courts in South Carolina and Louisiana ordered J&J to pay $327 million and $256 million respectively. In Texas, a division of J&J, Jannssen Pharmaceuticals, agreed to pay $158 million to settle claims that it made “false or misleading statements about the safety, cost and effectiveness of the expensive anti-psychotic medication Risperdal, and improperly influencing officials and doctors to push the drug.” John Grohl, writing at PsychCentral, observed:

Janssen got off easy with this one. They don’t have to admit to any liability with the settlement, and Johnson & Johnson — who made billions off of the sale of Risperdal — will barely blink their corporate eyeballs as they make out the check.

In an illuminating series called “Risperdal on Trial,”  is a fly on the wall in a Texas courtroom where the judge convenes business with a shout of “Saddle up!”  Through him, we hear J&J’s attorney make an opening statement that seems calibrated to a jury of Sarah Palin fans, with lines like, “The idea that a drug rep tells a doctor what to prescribe and then the doctor prescribes it is just plain wrong—you betcha!”  In the final chapter, Applbaum shocks us with the observation that the most aggrieved victims will derive little if any benefit from the legal wrangling.

The State of Texas is not suing because children or elderly have been needlessly harmed, but to get its money back. Even beyond the court costs and percentage of the settlement that the whistleblower, Allen Jones, stands to receive if the plaintiff side wins, it seems doubtful that much of the proceeds would find its way back into the impoverished mental health care system of the state. 

Johnson & Johnson spends a lot of time in court, one learns, and it has plenty of company.

Over the past decade, we’ve seen virtually all the psychiatric pharmaceutical companies be indicted or pay settlements or fines for their unethical behavior when it comes to marketing and selling such medications (psychcentral).

False Claims Act prosecutions appear to work well at transferring money from drug companies to government agencies and law firms, and, to a lesser extent, whistleblowers. But, they have done little, it seems, to protect patients from overpriced, unsuitable and dangerous drugs.  Prescriptions may change.  “They are now drugging fewer foster kids in the state of Texas in 2012 than they were in 2006,” said Allen Jones, on of the whistleblowers who testified against J&J.  But the system remains broken, leaving patients vulnerable to new abuses.