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
Follow @BrettEmison on Twitter.
Brett Emison is currently a partner at Langdon & Emison, a firm dedicated to helping injured victims across the country from their primary office near Kansas City. Mainly focusing on catastrophic injury and death cases as well as complex mass tort and dangerous drug cases, Mr. Emison often deals with automotive defects, automobile crashes, railroad crossing accidents (train accidents), trucking accidents, dangerous and defective drugs, defective medical devices.
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