WASHINGTON August 10, 2011, 11:44 am ET
Johnson & Johnson has tentatively agreed to settle a single misdemeanor criminal charge related to a multi-year government investigation into the marketing of its psychiatric drug Risperdal.
The company said Monday in a regulatory filing that the agreement related to an allegation that the company promoted Risperdal for unapproved uses. The agreement, which has not been finalized, was disclosed in a filing with the Securities and Exchange Commission.
J&J said it has set aside funds to pay the proposed settlement fee, but did not disclose the amount.
The Justice Department and the U.S. attorney’s office in Philadelphia are still pursuing other criminal and civil actions against the company, according to the filing.
Since 2004, J&J’s Janssen Pharmaceuticals unit has received numerous subpoenas over Risperdal from federal and state prosecutors. Attorneys general from 11 states are seeking penalties from J&J, which is based in New Brunswick, N.J.
J&J said the government plans to join civil lawsuits filed by company whistleblowers who allege off-label marketing of Risperdal and a related drug Invega. When federal prosecutors join such cases it usually signals that the government believes it may be able to recover millions of dollars paid for prescriptions for patients in government health programs like Medicare and Medicaid. Risperdal and Invega are both used to treat schizophrenia and other psychiatric disorders.
The company said it is unclear whether the civil suits can be settled due to various factors, including “significant facts in dispute … and numerous parties involved.”
Marketing drugs for off-label, or unapproved uses, is illegal, though common in the pharmaceutical industry. In recent years the Justice Department has pursued allegations of off-label marketing against virtually every major pharmaceutical company.
The government probe started with a 2004 federal subpoena demanding documents, covering the years 1997 through 2002, on J&J’s sales practices, payments to physicians related to marketing of Risperdal and clinical trials conducted on the drug. That subpoena came from the Office of the Inspector General of the U.S. Office of Personnel Management.
In 2005, the U.S. Attorney’s Office in Philadelphia also subpoenaed J&J, asking for information on the marketing of and adverse reactions to Risperdal, which brought in more than $3 billion in annual sales before losing patent protection and going generic about three years ago.
Attorneys general in 11 states are also seeking penalties from J&J for alleged off-label marketing of Risperdal, overpayment by state health programs and side effects to patients.
In October 2010, a Louisiana jury ruled that J&J had illegally marketed Risperdal and should pay $258 million in damages to the state. J&J said Monday it is appealing the decision.
In June a South Carolina judge levied a $327 million fine against the drugmaker for deceptive marketing of Risperdal. J&J says it will seek relief from the penalty or appeal the case.
Johnson & Johnson shares fell $1.66, or 2.7 percent, to $60.54 in midday trading Wednesday.
by The Associated Press