North Carolina Department of Justice
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North Carolina wins $38.8 million settlement from Johnson & Johnson

Release date: 11/20/2013

Funds part of multistate settlement for improper drug marketing

RaleighNorth Carolina will receive $38.8 million in restitution and other recovery as part of a Medicaid fraud settlement to resolve allegations that Johnson & Johnson improperly marketed some drugs, Attorney General Roy Cooper said today.
The funds to North Carolina are part of a $1.2 billion settlement with other states and the federal government.  The settlement resolves allegations that New Jersey drug manufacturer Johnson & Johnson and its subsidiary Janssen Pharmaceuticals improperly marketed the atypical antipsychotic drugs Risperdal and Invega.
“Patients and health care professionals deserve to have accurate information before taking or prescribing drugs,” Cooper said.  “Pharmaceutical companies have an obligation to make sure they are properly marketing their drugs for approved uses and not spreading misinformation.” 
North Carolina’s $38.8 million share of the settlement includes funds for Medicaid efforts in the state as well as civil penalties for the public schools. 

North Carolina and the other states allege that the companies promoted and marketed Risperdal and Invega for uses that were not approved by the Food and Drug Administration (FDA) and were not medically indicated, such as to treat elderly dementia patients and hyperactive children.  Once the FDA approves a drug as safe and effective, a manufacturer cannot market or promote that drug for an unapproved use, a practice called off-label marketing.

The states contend that between January 1, 1999 and December 31, 2005, the companies promoted Risperdal for off-label uses, made false and misleading statements about the safety and efficacy of Risperdal, and paid illegal kickbacks to health care professionals to induce them to promote or prescribe Risperdal to children, adolescents and the elderly when the FDA had not approved the drug for those patients.  In addition, the states contend that from January 1, 2007 through December 31, 2009, the companies promoted Invega for off-label uses and made false and misleading statements about its safety and efficacy. 

Because of these alleged unlawful actions, government-funded health care programs wound up purchasing these drugs for unapproved uses, and false and/or fraudulent claims were submitted to Medicaid.  Medicaid is a joint federal-state program that provides health insurance for the poor.  
The settlement is based on whistleblower actions filed in the United States District Court for the Eastern District of Pennsylvania.  In addition to the civil cases, 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 and pay an additional $400 million in criminal fines and forfeitures to the federal government.

The North Carolina settlement agreement was reached by the Attorney General’s Medicaid Investigations Division and the North Carolina Division of Medical Assistance.  The MID investigates fraud and abuse by hospitals, doctors, pharmaceutical companies, mental health care providers,  and others, as well as patient abuse and neglect in Medicaid-funded facilities. Over the past decade, Cooper’s MID has recouped more than $500 million and helped to convict hundreds of individuals on criminal charges.

Media contact: Noelle Talley (919) 716-6413