J&J Pays $149 Million to Resolve VS&G Qui Tam Alleging Kickbacks to Promote Risperdal

On November 4, 2013, the U.S. Department of Justice announced that it had finalized an agreement with pharmaceutical giant Johnson & Johnson (J&J) to resolve for $2.2 billion certain criminal and civil claims arising from the company’s alleged illegal marketing of the atypical antipsychotic drug, Risperdal. This settlement resolved a number of qui tam cases brought under the False Claims Act, and included a $149 million payment to resolve a qui tam action brought by a Vogel, Slade & Goldstein client against J&J and Omnicare, the nation’s largest long term care pharmacy chain, based on alleged kickback transactions between the two companies that were designed to increase Risperdal sales to the residents of the nursing homes serviced by Omnicare.

As alleged in the complaint against J&J filed by firm partner Shelley R. Slade, the J&J-Omnicare scheme not only led to medically unnecessary or unreasonable sales paid for by Medicare and Medicaid, it also posed a serious threat of patient harm: Risperdal’s label has a black box warning advising that the drug poses a risk of death when used by the elderly with dementia-related psychosis, a use for which the drug has not been approved. Indeed, illegal kickbacks, such as those alleged in the qui tam complaint, create an unacceptable risk that health care providers will recommend clinically inappropriate uses of medication, including dangerous uses that have not been approved by the Food and Drug Administration.