Johnson & Johnson Reserves Additional $600 Million For Settlement

Brett Emison

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Johnson & Johnson - the same company that brought you "no more tears" - has set aside an additional $600 million in reserves for a potential settlement over allegations the company paid kickbacks to a company that provides medication to nursing homes. Lawsuits allege that Johnson & Johnson made improper payments to drug distributor Omnicare in order to get the company to purchase more of J&J's schizophrenia drugs Risperdal and Invega as well as the respiratory drug Natrecor.

Johnson & Johnson's most recent announcement comes on top of an additional $3.3 billion chard the company took in the 4th quarter related to Risperdal lawsuits and investigations.

Johnson & Johnson has had its share of difficulties with at least 11 different product recalls in 2011. The J&J recalls included contact lenses, syringes filled with prescription medications, hernia devices, artificial hip implants, and even Tylenol.

The Risperdal case potentially mirrors J&J's conduct involving its DePuy artificial hip implants. The Risperdal cases allege that Johnson & Johnson improperly paid a drug distributor to promote and prescribe Johnson & Johnson medications. Similarly, Johnson & Johnson paid more than $80 million to orthopedic surgeons around the country to promote its DePuy artificial hip products. The US Department of Justice, in 2007, brought charges against four medical device companies - including J&J's DePuy - claiming the companies were using kickbacks to doctors in order to promote their products. But DePuy kept paying doctors. $48 million to doctors in 2009 and $33 million to doctors in 2010.

Reports suggest that Johnson & Johnson will use the $600 million Risperdal set-aside to finance a $2.2 billion settlement that includes both civil and criminal penalties.

[More on Johnson & Johnson]

Read More:

• J&J to Book $600 Million Legal Charge [Jonathan Rockoff at WSJ]
• Johnson & Johnson plans $600 million charge linked to Risperdal sales [Ransdell Pierson at Reuters]
• Johnson & Johnson Reserves Funds for Settlement [AP via NYT]
• Johnson & Johnson reportedly will pay $2.2Bto settle drug claims [Ira Kantor at The Boston Herald]
• Doctors Paid Millions To Promote Drugs and Medical Devices
• Johnson & Johnson Becomes the "Plenty of Tears" Brand Due to Loss of Trust in Marketplace

(c) Copyright 2012 Brett A. Emison

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