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FOR IMMEDIATE RELEASE
November 04, 2013
Washington to receive record Medicaid fraud settlement of $21,447,550

Johnson & Johnson and Janssen Pharmaceuticals, Inc. to pay $1.72B to resolve health care fraud allegations against government programs

SEATTLE — Attorney General Bob Ferguson announced that Washington has joined with other states and the federal government in a global settlement with New Jersey pharmaceutical manufacturer, Johnson & Johnson (J & J) and its subsidiary, Janssen Pharmaceuticals, Inc., to resolve civil allegations of unlawful marketing practices to promote the sales of their atypical antipsychotic drugs, Risperdal and Invega.

In this case, these drugs were used for a variety of ‘off-label’ uses including treatment of elderly patients with dementia and Alzheimer’s disease.

Once the Federal Drug Administration (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.

This is not the first time Janssen has settled allegations of improper drug marketing. In 2012, 37 attorneys general recovered $181 million for unapproved drug promotion, including Risperdal. Washington state received $4.6 million.

“The Attorney General’s Office brings civil enforcement actions to stop Medicaid fraud, and unfair and deceptive business practices,” said Ferguson. “Our goal is to hold those accountable who don’t play by the rules. The recovered funds will help the same people J & J and Janssen Pharmaceuticals targeted.”

Washington will recover money

Under the terms of the civil settlement, the companies will pay $1.72 billion to the states and the federal government.  The total recovered for Washington is $21,447,550.

Of this amount, Washington state will receive $10,468,274 to be deposited into the Medicaid Fraud Penalty account. As specified by statute, the Legislature will dedicate the money to Medicaid services, fraud detection and prevention activities, recovery of improper payments, other Medicaid fraud enforcement activities, or the prescription monitoring program.

The remaining $10,979,276 is returned to the federal government for administration of Medicaid in Washington state. The federal government generally pays for half of Washington state’s Medicaid program.

The manufacturers’ 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.

What the settlement resolves

The settlement resolves four qui tam, or whistleblower, lawsuits filed in the U.S. District Court for the Eastern District of Pennsylvania, 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 $485 million in criminal fines and forfeitures.

Overview of the allegations

J & J and Janssen allegedly promoted, marketed, and introduced Risperdal and Invega into interstate commerce. This was done for uses that were not approved by the FDA and for uses that were not medically indicated.

The states contend that during the period Jan. 1, 1999 through Dec. 31, 2005, the companies promoted Risperdal for off-label uses. They also contend the companies made false and misleading statements about the safety and efficacy of Risperdal, and paid illegal kickbacks to health care professionals and long-term care pharmacy providers to induce them to promote or prescribe Risperdal to children, adolescents and the elderly when there was no FDA approval for Risperdal use in these patient populations.

The states further contend that from Jan. 1, 2007 through Dec. 31, 2009, the companies promoted Invega for off-label uses and made false and misleading statements about the safety and efficacy of Invega.

J & J and Janssen to be monitored

As part of the global resolution, the companies will enter into a Corporate Integrity Agreement with the U.S. Dept. of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing practices.

A team from the National Association of Medicaid Fraud Control Units worked closely with the federal government on the investigation and conducted the settlement negotiations with the pharmaceutical manufacturers on behalf of the states. Team members included representatives from the Offices of the Attorneys General for the states of New York, Massachusetts, Ohio and California.

Senior Counsel Carrie Bashaw was the lead for this settlement for the Washington State Attorney General’s Office.

Washington State Medicaid Fraud Control Unit

The Washington State Medicaid Fraud Control Unit investigates and prosecutes fraud by Medicaid providers. The unit also monitors complaints of resident abuse or neglect in Medicaid funded nursing homes, adult family homes and boarding homes providing valuable assistance to the local law enforcement in investigating and prosecuting crimes committed against vulnerable adults. 

Report suspected Medicaid fraud: 1-800-562-6906 or send an email to HotTips@hca.wa.gov.

You can also report provider fraud via the Attorney General’s Office website.

The Washington Department of Social and Health Services, Office of Fraud & Accountability investigates client fraud.  You can report Medicaid Client Fraud via the Department’s Online Complaint Form, call the Welfare Fraud Hotline at 1-800-562-6906 or send the complaint to Welfare Fraud Hotline, P.O. Box 45817, Olympia, Washington 98504-5817.  
 
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