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Johnson & Johnson and Janssen Pharmaceuticals, Inc. to Pay More Than $1.6 Billion to Resolve Healthcare Fraud Allegations

Rhode Island to Recover More Than $5.6 Million for Medicaid Budget

Attorney General Peter F. Kilmartin announced today that Rhode Island will receive more than $5.6 million as its share of a multistate and federal settlement with New Jersey pharmaceutical manufacturer, Johnson & Johnson (J&J) and its subsidiary, Janssen Pharmaceuticals, Inc., to resolve civil and criminal allegations of unlawful marketing practices to promote the sales of their atypical antipsychotic drugs, Risperdal and Invega.

Under the terms of the civil settlement, the companies will pay over $1.2 billion to the states and the federal government. The settlement resolves four qui tam, or whistleblower, lawsuits filed in the United States District Court for the Eastern District of Pennsylvania, under the provisions of the federal False Claims Act and similar state False Claims statutes. In addition, Janssen Pharmaceuticals, Inc. will plead guilty in federal court to a criminal misdemeanor charge of misbranding Risperdal in violation of the Food, Drug, and Cosmetic Act. As part of the criminal plea, Janssen has agreed to pay an additional $400 million in criminal fines and forfeitures.

"This is one of the single largest settlements a pharmaceutical company has paid for failure to comply with federal and state laws regulating the marketing and sale of pharmaceuticals," said Attorney General Kilmartin. "These laws are designed to protect patients from receiving drugs that have not been approved for certain treatment, and to ensure that state taxpayer dollars are not funneled into huge profits for pharmaceutical giants."

J&J and Janssen allegedly promoted and marketed, and introduced Risperdal and Invega into interstate commerce, for uses that were not approved by the Food and Drug Administration (FDA) and for uses that were not medically indicated. Once the FDA approves a drug as safe and effective, a manufacturer cannot market or promote a drug for an "off-label" use, i.e., any use not specified in the FDA-approved product label.

The states contend that during the period January 1, 1999 through December 31, 2005, the companies promoted Risperdal for off-label uses, made false and misleading statements about the safety and efficacy of Risperdal, and paid illegal kickbacks to health care professionals and long-term care pharmacy providers to induce them to promote or prescribe Risperdal to children, adolescents and the elderly when there was no FDA approval for Risperdal use in these patient populations. The states further contend that from January 1, 2007 through December 31, 2009, the companies promoted Invega for off-label uses and made false and misleading statements about the safety and efficacy of Invega. The manufacturers' alleged unlawful conduct caused false and/or fraudulent claims to be submitted to or caused purchases by government funded health care programs, including the state Medicaid programs.

As part of the global resolution, the companies will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing practices.

A team from the National Association of Medicaid Fraud Control Units worked closely with the federal government on the investigation and conducted the settlement negotiations with the pharmaceutical manufacturers on behalf of the states.

In August 2012, Attorney General Kilmartin announced that J&J and Janssen reached a $200 million dollars multi-state settlement for its off-label marketing of Risperdal, which Rhode Island received $2.67 million as its share of the settlement.

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