Johnson & Johnson Accused of Pharmacy Kickbacks

In a recent nursing home injury blog, our Maryland-based attorneys discussed the epidemic of unnecessary drugging and chemical restraints going on in nursing homes, that can cause nursing home injury and threaten the lives of elderly residents.

Last week, the U.S. Justice Department filed a civil False Claims Act complaint against the drug giant Johnson & Johnson, for allegedly paying millions of dollars in kickback payments to a pharmacy company, in order to boost sales of antipsychotic prescription drugs for nursing home patients—drugs that can be used as chemical restraints with residents, that patients may or may not need.

The complaint alleges that from 1999—2004, pharmacists from Omnicare, the nation’s largest pharmacy, worked intensively to persuade physicians to prescribe Johnson & Johnson drugs in nursing homes, including the antipsychotic drug Risperdal, in exchange for kickback payments. The kickbacks were reportedly delivered to Omnicare in the form of rebates, grants, or educational funding.

Johnson & Johnson reportedly turned to Omnicare to increase the building of market share, knowing that physicians accepted advice on drugs from Omnicare pharmacists more than 80% of the time, and they were seen as an extension of the Johnson & Johnson workforce. The nursing home residents allegedly included people suffering from Alzheimer’s disease and dementia.

During this period, the annual purchase of Johnson & Johnson drugs increased from $100 million to more than $280 million. Annual purchases of Risperdal, the antipsychotic drug, were over $100 million during the same period.

Risperdal is approved by Food and Drug Administration (FDA) to treat schizophrenia and bipolar disorder, but is not specifically approved to treat behavioral problems with dementia in elderly people. In 2005, the FDA mandated that the Risperdal label have a “black box” warning with the increased chances of death among elderly residents with dementia-related psychosis, compared with those taking a placebo. Omnicare allegedly engaged in a “Risperdal Initiative” to persuade physicians to prescribe Risperdal specifically for patients with dementia.

The Johnson & Johnson kickback payments reportedly violated the federal anti-kickback statute, and led Omnicare to submit false and fraudulent claims to Medicaid.

Tony West, Assistant Attorney General for The Justice Department’s Civil Division stated that kickbacks cause a distortion of the health care professional’s judgment—where profit is put in front of the best possible medical treatment for the nursing home resident. When manufacturers promote their drugs for profit, instead of focusing on the best care for the resident, the elderly and the poor are taken advantage of, and can suffer nursing home abuse or injury.

Johnson & Johnson defended its practices, and claimed that the company looks forward to their presentation of evidence in court.

The claims against the medical giant were allegedly reported by whistleblowers, including a former financial analyst for Omnicare.

U.S. Says Johnson & Johnson Paid Kickbacks to Omnicare, The New York Times, January 15, 2010
Justice Suit Accuses Johnson & Johnson of Paying Kickbacks, The Washington Post, January 16, 2010
United States Files Suit Against Drug Manufacturer Johnson & Johnson for Paying Kickbacks to Nation’s Largest Nursing Home Pharmacy, Press Release from The United States Attorney’s Office, District of Massachusetts, January 15, 2010
Johnson & Johnson Accused of Paying Kickbacks to Pharmacy Chain Omnicare, The Star-Ledger, January 15, 2010
Has Johnson & Johnson’s Reputation Been Damaged?, The Street, January 21, 2010
Johnson & Johnson Fights Charges of Recalls and Kickbacks, Daily Finance, January 19, 2010

Related Web Resources:

U.S. Food and Drug Administration, FDA

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