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Johnson & Johnson Targeted by Feds for Alleged Kickbacks

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The U.S. Attorney’s Office in Boston is going after Johnson & Johnson for allegedly paying kickbacks to increase sales of Levaquin, Risperdal and other drugs at Omnicare, one of the nation’s largest nursing home chains.

In a complaint filed last week, 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.

We will pursue those who break the law to take advantage of the elderly and the poor,” Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, said in a press release. “Kickbacks such as those alleged here distort the judgments of health care professionals and put profits ahead of sound medical treatment.”

In order to induce Omnicare and its pharmacists to recommend Johnson drugs, prosecutors allege the company paid kickbacks to Omnicare in numerous ways. First, the complaint alleges that J&J entered into agreements with Omnicare by which Omnicare was entitled to increasing levels of rebates from Johnson & Johnson so long as Omnicare implemented specific programs to increase the prescriptions of the company’s drugs. Second, the complaint alleges that Johnson & Johnson paid Omnicare millions of dollars for “data,” much of which Omnicare never provided. According to the complaint, the true purpose of these payments was to induce Omnicare to recommend the firm’s drugs. Third, the complaint alleges that Johnson & Johnson made various other substantial kickback payments to Omnicare, calling the payments “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend the company’s drugs.

The complaint alleges that the kickback arrangement spanned a five year period, from 1999 to 2004. It also details the alleged results from the arrangement. For example, rom 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.

Federal prosecutors claim that overall, Omnicare’s annual purchases of the company’s drug nearly tripled to more than $280 million.

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

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