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Nov. 4, 2013

Johnson & Johnson Settlement Nothing New for Company; Small Fine Unlikely to Prompt Change in Behavior

Statement of Sammy Almashat, Researcher, Public Citizen’s Health Research Group

Today’s announcement that Johnson & Johnson has agreed to plead guilty to several criminal charges and pay $2.2 billion in criminal and civil fines to the federal and state governments is the latest in a long line of multibillion-dollar health fraud settlements reached between the drug industry and the federal and state governments. The settlement ranks as the third-largest health fraud settlement ever reached between a pharmaceutical company and the federal government and comes just one year after GlaxoSmithKline’s record-breaking $3 billion agreement in July 2012.

Today’s settlement focused mostly ($1.7 billion of the $2.2 billion settlement) on Johnson & Johnson’s illegal off-label promotion of its blockbuster antipsychotic drug, Risperdal. The company paid a criminal fine of $400 million and pleaded guilty to marketing the drug to treat behavioral disturbances and psychotic symptoms in elderly patients without schizophrenia (at the time, the drug was approved only to treat schizophrenic symptoms). The company will also pay almost $1.3 billion in civil penalties to resolve allegations that it marketed the drug for use in the elderly, children and mentally disabled patients when it was not approved for any of the advertised uses.

The marketing campaigns were allegedly conducted in full knowledge that the drug increased the risk of diabetes, strokes in the elderly and breast enlargement in young boys, all of which its marketing teams allegedly downplayed in their sales pitches to doctors.

The government also claimed that the company repeatedly ignored warnings from the Food and Drug Administration (FDA) against promoting the drugs in the targeted elderly populations and children.

Today’s settlement is nothing new for the company. According to a 2012 Public Citizen report, Johnson & Johnson racked up $2.3 billion in criminal and civil penalties for various allegations of wrongdoing from 1991 through July 18, 2012.

Johnson & Johnson’s status as a repeat offender demonstrates that despite the seemingly large sums, the fines imposed on pharmaceutical companies for dangerous and illegal conduct pale in comparison to the profits generated from such activity. Global sales of Risperdal totaled $24 billion between 2003 and 2010, ten times today’s settlement amount.

Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become common, companies will continue defrauding the government and putting patients’ lives in danger.

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