In the largest settlement for one drug, Janssen Pharmaceuticals pleaded guilty to misbranding its antipsychotic medication, Risperdal, as part of a massive $2.2 billion settlement with the Department of Justice. Janssen is a unit of Johnson & Johnson.

Janssen entered the guilty plea to one misdemeanor at an hour-long hearing before U.S. District Judge Timothy Savage in Philadelphia, Pennsylvania, according to Bloomberg.com. Judge Savage asked an attorney for Johnson & Johnson, "Did Janssen do what the government said it did?" Before entering a plea on behalf of Janssen, its deputy general counsel, Joseph Braunreuther said, "Yes your honor," Bloomberg.com reported.

The settlement is the government's third largest with a drugmaker, is the result of four whistleblower lawsuits, and includes $1.6 billion in civil payments to the United States and 45 individual states over three dangerous drugs, including Risperdal, according to Bloomberg.com. Janssen agreed to pay a $334 million fine and to forfeit $66 million.

The agreement settles charges that Janssen marketed drugs for unapproved uses and paid "kickbacks" to doctors and nursing homes, according to CNN Money. The settlement involves both Risperdal and Invega, schizophrenia medications, as well as Natrecor, a heart failure drug, according to the drug firm and Attorney General (AG) Eric Holder.

Janssen pleaded guilty to marketing Risperdal to senior patients diagnosed with dementia for uses not approved by the U.S. Food and Drug Administration (FDA). The company settled civil claims over the way in which it marketed Risperdal without approval for the elderly, children, and the mentally disabled, as well as for having paid kickbacks to physicians and Omnicare Inc., which is the largest pharmacy for nursing homes. Janssen denied the civil allegations.

Janssen allegedly worked to sell Risperdal for an array of off-label uses including, bipolar disorder, dementia, mood disorders, and anxiety disorders. The company acted in a "calculated manner" with intent to "maximize profits with no regard to risk," Judge Savage said prior to approving the terms of the plea agreement, according to Bloomberg.com. The drugmaker pleaded guilty to the conduct from March 2002 to December 2003; however, the scope of its off-label marketed extends beyond that time frame, according to prosecutors.

The four whistleblower lawsuits were filed in federal court in Philadelphia under the False Claims Act, which enables private citizens to sue on behalf of the United States government and to share in the recoveries, Bloomberg.com reported. In this matter, the Justice Department joined the cases. Criminal plea negotiations took more than one year, a Janssen attorney told the judge.

Johnson & Johnson also signed a five-year corporate integrity settlement with the inspector general of the Department of Health and Human Services. "This company is going to be under a magnifying glass for a period of time," Judge Savage said. According to AG Holder, Johnson & Johnson and two of its subsidiaries "lined their pockets at the expense of American taxpayers, patients, and the private insurance industry," CNN Money reported.

The settlement is one of the largest whistleblower payouts in American history, according to one plaintiff attorney, CNN Money wrote. Whistleblowers in three states will collect $167.7 million.

"Although consultant pharmacists purported to provide 'independent' recommendations based on their clinical judgment, J&J viewed the pharmacists as an 'extension of [J&J's] sales force,'" the Justice Department said. Holder noted that kickbacks and other incentives could have placed the "health of some patients at risk," according to CNN Money.

Sources:

• Bloomberg New.com; Janssen Pleads Guilty to Selling Risperdal Off-Label; by Sophia Pearson; November 7, 2013; http://www.bloomberg.com/news/2013-11-07/janssen-pleads-guilty-to-selling-risperdal-off-label.html
• CNN Money; Johnson & Johnson to Pay $2 Billion for False Marketing; by Gregory Wallace (CNN Justice Correspondent Evan Perez contributed); November 4, 2013; http://money.cnn.com/2013/11/04/news/companies/johnson-and-johnson-settlement/