Published on:

Multi-Billion Dollar Settlement in Johnson & Johnson Nursing Home Medication Case

CNN reported today on an enormous settlement in a false marketing and kickback case involving nursing homes, medications, and one of the largest companies in the world: Johnson & Johnson. The case is a testament to the way that many in the industry prioritize their own bottom line over the best interest of residents (and taxpayers).

Federal Nursing Home Case
As discussed in the report, a $2 billion settlement was announced today by the United State Justice Department. That sizeable figure makes the case one of the largest settlements ever for the health-care industry. The main issue in the case was the marketing practices of the Johnson & Johnson. Considering the dangers of medications and the high cost paid by taxpayers via the Medicare and Medicaid systems for those drugs, there are very clear rules about advertising for these products.

Most obviously, companies must be careful in selling the medication only to treat ailments and issues for which they have been approved by regulatory bodies. Skirting those rules in order to increase profits is never acceptable. Yet, that is exactly what Johnson & Johnson was accused of.

Specifically, federal officials claimed that the company illegally marketed drugs targeted to seniors, including Risperdal, Invega, and Natrecor. Risperdal and Invega are approved to help those with schizophrenia while Natrecor is a heart failure drug. In the case of the schizophrenia drugs, instead of explaining to doctors the products use solely for residents with schizophrenia, the company allegedly marketed the drugs for use in elderly patients with dementia. At the same time the company apparently withheld knowledge that the drug Risperdal increased one’s risk of developing diabetes.

The company employed a team of pharmacists to help push the drug. Apparently the pharmacists would review patient records and then make an “independent” recommendation about drugs for residents. The Justice Department explained that the pharmacists were no more than consultants who were essentially part of the company’s sales team. The marketing ploy was just another part of Johnson & Johnson’s attempt to mislead doctors, patients, and nursing home resident to sell more of their product and make more money from taxpayer-funded health care programs.

In announcing the settlement, U.S. Attorney General Eric Holder explained that Johnson & Johnson (along with two subsidiary companies involved in the case) “lined their pockets at the expense of American taxpayers, patients, and the private insurance industry.”

This is not the first time that Johnson & Johnson has gotten in trouble for its push to sell more pharmaceuticals. The story notes how the company paid $1.2 billion in fines to the state of Arkansas two years ago for similar actions. In that case, officials alleged nearly 240,000 individual violations of the False Claims Act related to marketing for Risperdal.

It is disheartening to learn of companies engaging in practices that violate regulatory rules intended to keep vulnerable senior residents safe. But this settlement is a reminder of the need for elder care advocates to maintain vigilance on all fronts in the fight against elder abuse and exploitation.

See Other Blog Posts:

Settlement in Nursing Home Kickback Case

Supreme Court Mandates Arbitration in Nursing Home Death Case