Johnson & Johnson Hit with Federal Kickback Charges

Johnson & Johnson is facing charges that it paid kickbacks to Omnicare, one of the nation’s largest nursing home chains, in order to push drugs like <"">Risperdal and <"">Levaquin at the chain’s facilities. According to allegations contained in a complaint filed by the U.S. Attorneys office in Boston, from 1999 to 2004 Johnson & Johnson paid kickbacks to Omnicare in a variety of forms, including rebates, grants and educational funding.

The complaint charges that Johnson & Johnson was aware that Omnicare pharmacists made recommendations to physicians about what drugs should be prescribed to home residents. The complaint repeatedly mentions internal Johnson & Johnson e-mails and statements detailing the relationship with Omnicare. The government claims that those documents show that Johnson & Johnson came to see Omnicare pharmacists as an extension of its sales force.

According to the complaint, while Johnson & Johnson was allegedly paying kickbacks, Omnicare’s annual purchases of Johnson & Johnson drugs nearly tripled to more than $280 million. For example:

*From September 2001 the market share of the antibiotic Levaquin’s increased to 66.4 percent from 19.2 percent at the end of 1998. At the same time, a similar antibiotic made by a different firm, Cipro, plunged to around 28 percent, from 80 percent.

*Use of Johnson & Johnson’s antipsychotic Risperdal nearly tripled during the five-year-period it received payments from the drugmaker. Prosecutors claim Risperdal was used to control anxiety among patients with dementia and Alzheimer’s disease, an off-label use of the drug. Drug makers are prohibited by law from promoting off-label uses.

Prosecutors allege that Johnson & Johnson’s conduct caused false or fraudulent claims to be filed with Medicaid, the public health program for the poor and disabled.

As we reported previously, in November, Omnicare agreed to pay $98 million to settle charges related to the alleged Johnson & Johnson kickback scheme. As part of the settlement, Omnicare entered into a corporate integrity agreement with the Department of Health and Human Services.

The claims against Johnson & Johnson were initiated by whistleblowers who could receive a share of any money the government collects.

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