Johnson & Johnson to pay $2.2 billion in Risperdal settlement

Johnson & Johnson has agreed to pay $2.2 billion to settle charges over how it aggressively marketed drugs.

It is one of the biggest settlements of a health care fraud case ever. Johnson and Johnson has agreed to pay $2.2 billion to settle charges over how it aggressively marketed drugs in the late 90s and early 200s, including paying kickbacks to pharmacists.

The pharmaceutical giant is accused of marketing its drug Risperdal, which is approved for treating schizophrenia, as a way to treat anxiety among elderly people with dementia, even though it increased their risk of death. Doctors are allowed to prescribe drugs for unapproved or so-called "off-label" uses, but it is illegal for a company to market a drug in a way that it hasn't been approved by federal regulators. Prosecutors say the company also promoted the drug to treat mentally ill boys -- even though it could cause them to grow breasts. Johnson & Johnson is currently fighting a large number of individual lawsuits related to those accusations. 

In the settlement, Johnson & Johnson pled guilty to “introducing a misbranded drug into interstate commerce.” But in a letter to its employees, company lawyers said they strongly dispute the government’s version of events and settled just to move on and avoid lengthy legal tie ups.  

By the way, the whistleblowers whose leaks spurred this investigation stand to gain about $168 million from the government’s taking.

About the author

Sabri Ben-Achour is a reporter for Marketplace, based in the New York City bureau. He covers Wall Street, finance, and anything New York and money related.

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