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Johnson & Johnson pays $2.2 billion for U.S. kickback, off-label settlement

Health care giant Johnson & Johnson will pay more than $2.2 billion to resolve criminal and civil claims arising from allegations of kickbacks to U.S. doctors and improper marketing claims about three of its prescription drugs.

The action announced Monday is one of the largest healthcare fraud settlements in U.S. history, with criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states of $1.72 billion.

Whistleblowers acting under the False Claims Act will share in the federal civil recovery. Pennsylvania whistleblowers will recieve $112 million, those in Massachusetts will get $27.7 million, and the California claimants will share $28 million of the recovery. The DOJ didn’t say how many whistleblowers will share the awards.

In 2011, J&J paid $70 million to resolve FCPA charges for overseas bribes paid by J&J’s subsidiary, DePuy International Limited. And at the same time, DePuy paid £4.8 million to the U.K. Serious Fraud Office in a civil recovery action.

In Monday’s action, the DOJ said Janssen Pharmaceuticals, a J&J subsidiary, paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales agents allegedly told the doctors they needed to increase their Risperdal prescriptions to get the fees.

The government also alleges that J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. The payments were characterized as “grants” or “educational funding,” but were actually designed to induce Omnicare and its hundreds of consultant pharmacists to promote the use of Risperdal and other J&J drugs in nursing homes.

The government also said J&J misbranded two of its drugs, Risperdal and Invega, as antipsychotics when they were only approved to treat schizophrenia. The drugs were marketed for off-label uses to control the behaviors of some of the nation’s most vulnerable patients, such as those with mental disabilities, children and nursing home patients, the DOJ said.

“Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges,” the DOJ said, “the claims settled by the civil settlements are allegations only, and there has been no determination of liability.”

In the 2011 FCPA settlement, the DOJ charged J&J subsidiary DePuy with conspiracy and violations of the FCPA through payments to public-sector doctors in Greece. The SEC brought civil charges relating to antibribery, books and records, and internal control violations of the FCPA.

In 2010, another big pharma, Novartis, paid $237.5 million to resolve civil allegations over kickbacks to U.S. doctors to prescribe Trileptal and five other drugs. The DOJ alleged that doctors were paid “honoraria” of between $1,500 and $2,000 to speak at physician “events” about the benefits of Novartis’ drugs. Some doctors earned as much as $150,000 a year in honoraria.

Many of the doctors selected by Novartis as speakers had no publications or teaching positions, the DOJ said. And several speakers “had difficulty with English. Other speakers were simply very poor communicators,” according to the complaint.

The DOJ’s November 4, 2013 release is here.


Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.

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