Posted in Drug & Medical Devices on November 5, 2013

In one of the largest payouts in history, people from three states will be taking home a share of the $167.7 million awarded to whistleblowers for exposing Johnson & Johnson’s use of improper marketing and kickbacks.

$2 Billion Settlement

In a press conference yesterday, Attorney General Eric Holder told reporters that Johnson & Johnson (J&J) and three of its subsidiaries reached an agreement to pay more than $2.2 billion to resolve criminal and civil claims. J&J was accused of marketing prescription drugs for uses that were never approved and paying kickbacks to physicians, pharmacies, and nursing homes.

The settlement agreements with the U.S. Department of Justice and 45 states involve J&J’s anti-psychotic drugs Risperdal and Invega, and the heart failure drug Natrecor. J&J subsidiary, Janssen Pharmaceuticals, admitted in a criminal plea agreement that it promoted the off-label use Risperdal to health care providers for the treatment of elderly patients who suffered from dementia, even though the drug was only approved to treat schizophrenia.

Risperdal

Risperdal has many serious side effects, including tardive dyskinesia (drug-induced abnormal movements), diabetes, pancreatitis, metabolic disorders, and gynecomastia (abnormal breast tissue growth in boys). The off-label use of Risperdal and other anti-psychotics to deal with challenging nursing home patients and children with ADHD or other behavior disorders has been referred to as a “chemical lobotomy.”

“[T]hese companies lined their pockets at the expense of American taxpayers, patients, and the private insurance industry,” said Holder. He went on to say that J&J’s alleged conduct “…recklessly put at risk the health of some of the most vulnerable members of our society – including young children, the elderly, and the disabled.”

Johnson & Johnson was quick to assuage shareholder anxieties, telling investors through a press release that the settlement was not an admission of any liability or wrongdoing and that the company denies the government’s civil allegations.

In a separate matter, a three-judge panel recently ruled that a whistleblower case against J&J and its subsidiary Ehicon could proceed. Joel Lippman, former vice president of clinical trials for J&J’s unit Ethicon, claims he was fired in 2006 for raising concerns about the safety and effectiveness of the Ortho-Evra birth control patch and other products.

Whistleblowing claims

The False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733 allows any person (called a “relator”) to bring a claim alleging fraud on behalf of the government. The act of filing such actions is known in the legal community as qui tam, but is commonly referred to as “whistleblowing.” Persons filing whistleblower claims usually receive about 15-25 percent of any recovered damages, but that amount may be higher or lower depending on specific circumstances.

Whistleblowing claims may also be filed under numerous other acts. For example, OSHA’s Whistleblower Protection Program enforces the whistleblower provisions of more than twenty whistleblower statutes protecting employees who report violations of various workplace safety, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health insurance reform, motor vehicle safety, nuclear, pipeline, public transportation agency, railroad, maritime, and securities laws.

The statute of limitations on such claims can be as little as 30 days. Therefore, in order to preserve your claim, it is important to contact a qualified attorney and file a claim with OSHA as soon as possible.

Sources:

“$168 million payout to Johnson & Johnson whistleblowers” by Gregory Wallace, Money CNN, November 4, 2013.

“J.&J. to Pay $2.2 Billion in Risperdal Settlement” by Katie Thomas, New York Times, November 4, 2013.

Additional documents and resources relating to the civil and criminal allegations are available on the U.S. Department of Justice website.