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Economy & Business

Johnson & Johnson To Pay $2.2 Billion Settlement


From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish at NPR West in California.


I'm Melissa Block in Washington, D.C.

And we begin this hour with news of two huge corporations, each of them resolving criminal and civil allegations in two separate cases. One is the hedge fund SAC, pleading guilty to insider trading. The other, pharmaceutical giant Johnson & Johnson, paying $2.2 billion to settle criminal and civil investigations. And we'll start with that story.

Allegations against Johnson & Johnson center on the false marketing of prescription drugs and paying kickbacks to pharmacists. Here's NPR's Yuki Noguchi.

YUKI NOGUCHI, BYLINE: In 2002, the Food and Drug Administration approved a drug called Risperdal for treatment of schizophrenia. But at a press conference today, Attorney General Eric Holder alleged Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, marketed the drug for broader, unapproved uses.

ATTORNEY GENERAL ERIC HOLDER: Johnson & Johnson and Janssen Pharmaceuticals promoted Risperdal and Invega to doctors and to nursing homes as a way to control behavioral disturbances in elderly dementia patients, in children, as well as the mentally disabled.

NOGUCHI: Janssen entered a criminal plea agreement that includes payment of $400 million. In a separate civil charge, the Justice Department said both companies offered kickbacks to a pharmaceutical company called Omnicare in exchange for its promotion of the drug.

HOLDER: At the company's behest, the pharmacist allegedly recommended Risperdal for nursing home patients who exhibited behavioral symptoms associated with Alzheimer's disease, as well as with dementia.

NOGUCHI: The settlement included a similar claim regarding another drug, Natrecor, for patients with severe heart failure, which the company allegedly marketed to those with less severe conditions. In a statement, Johnson & Johnson says it is not admitting wrongdoing and it denies the civil allegations. The law says companies can only market medicines for approved use. But doctors legally prescribe medications for unapproved use or off-label all the time. Paul Rubin is an economics professor at Emory University who has worked with drug companies.

PAUL RUBIN: The off-label stuff is fairly ambiguous. What you can and can't do is sometimes subject to interpretation.

NOGUCHI: But Attorney General Holder said, although the Justice Department did not cite specific cases where individuals were harmed, these were not victimless crimes.

HOLDER: Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients and private insurance industry.

NOGUCHI: As part of the deal, Johnson & Johnson will be subject to a five-year compliance review. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.