South Dakota has joined other states, along with the federal government, in a settlement against Johnson & Johnson and its subsidiary Janssen Pharmaceuticals.
In the civil lawsuit, the companies are accused of illegally marketing the antipsychotic drugs Risperdal and Invega. As part of the settlement, the companies will pay over $1.2 billion to the states and the federal government. The total portion of the settlement amount recovered by South Dakota is $2,888,232.09, of which $1,908,452.19 will be retained by the federal government as the federal Medicaid share. The remaining $979,779.90 will go to the state general fund to offset alleged Medicaid damages in this case.
The settlement resolves four whistleblower lawsuits under the provisions of the federal False Claims Act and similar state False Claims statutes. In addition, Janssen Pharmaceuticals, Inc., will plead guilty in federal court to a criminal misdemeanor charge of misbranding Risperdal in violation of the Food, Drug, and Cosmetic Act. As part of the criminal plea, Janssen has agreed to pay an additional $400 million in criminal fines and forfeitures.
J & J and Janssen allegedly promoted and marketed, and introduced Risperdal and Invega into interstate commerce, for uses that were not approved by the Food and Drug Administration (FDA) and for uses that were not medically indicated. Once the FDA approves a drug as safe and effective, a manufacturer cannot market or promote a drug for an “off-label” use, i.e., any use not specified in the FDA-approved product label. The manufacturers’ alleged unlawful conduct caused false and/or fraudulent claims to be submitted to or caused purchases by government funded health care programs, including the state Medicaid programs.
The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money.