A.G. Schneiderman announces $1.6 billion settlement with Johnson & Johnson and Janssen Pharmaceuticals

New York to receive $138 million as part of a settlement with the states and federal government of civil claims and criminal charges against the companies

Attorney General Eric T. Schneiderman has announced New York has joined with other states and the federal government in a $1.6 billion settlement resolving civil and criminal allegations that Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals Inc., promoted the sale and use of Risperdal and Invega for uses not approved by the U.S. Food and Drug Administration and introduced Risperdal and Invega into interstate commerce. Risperdal and Invega are anti-psychotic medications approved by the FDA to treat schizophrenia and bipolar I disorder during the periods outlines below.

"Parents of children with hyperactivity disorders and other vulnerable patients should be able to trust their doctor's advice without fear that drug companies are manipulating their physician's judgment. This settlement should serve as a warning to pharmaceutical corporations: the illegal promotion of drugs for off-label uses must stop," Schneiderman said. "This landmark agreement holds companies accountable for practices that put patients in danger, and reaffirms one set of rules for the pharmaceutical giants - and it goes even further by ensuring that corporations stop rewarding doctors for prescribing certain drugs."

Johnson & Johnson and Janssen, pharmaceutical manufacturers based in New Jersey, agreed to pay the states and the federal government more than $1.2 billion in civil damages and penalties to compensate Medicaid, Medicare, and various other government programs. Additionally, Janssen will plead guilty in federal court in Philadelphia to violations of the U.S. Food, Drug, and Cosmetics Act, and has agreed to pay $400 million in criminal fines and forfeitures. More than $523 million of the civil settlement will go to state Medicaid programs, which are funded jointly by the states and the federal government. New York state's Medicaid program will receive more than $138 million. The remaining $749,240,137 is designated for federal health care programs, including the federal Medicaid share, affected by the companies' conduct.

The investigation resulted from four whistleblower lawsuits filed in the U.S. District Court for the Eastern District of Pennsylvania, under the federal False Claims Act and various state false claims acts, including the New York False Claims Act. The U.S. and the states contend that, from Jan. 1, 1999, through Dec. 31, 2005, the companies marketed Risperdal for off-label uses, made false and misleading statement about the safety and efficacy of Risperdal, and paid illegal kickbacks to health care professionals and long-term care pharmacies to induce them to promote or prescribe Risperdal to patient populations, such as children, adolescents and the elderly, for which there was no FDA approval. They further contend that, from Jan. 1, 2007, through Dec. 31, 2009, the companies promoted Invega for off-label uses and made false or misleading statements about the safety and efficacy of Invega. 

As part of the global resolution, the companies have also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing and sales practices.

A team from the National Association of Medicaid Fraud Control Units, led by New York and Massachusetts, worked closely with the federal government on the investigation, and conducted the settlement negotiations with the pharmaceutical manufacturers on behalf of the states. For New York, the case was handled by Special Assistant Attorney General Marie Spencer of the attorney general's Medicaid fraud control unit; Computer Program Analyst Nicholas Furnari; Supervising Special Auditor/Investigator Theresa White; Associate Special Auditor/Investigator Deowattie Persaud; and Senior Special Auditor/Investigator Matthew Tandle, under the supervision of Assistant Chief Auditor Michael LaCasse, MFCU Deputy Attorney General Monica Hickey-Martin, and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.