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Madigan, settlement in Johnson & Johnson fraud case

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Yesterday, Atty. Gen. Lisa Madigan announced a $1.6 billion joint state and federal settlement with Johnson & Johnson and its subsidiary Janssen Pharmaceuticals.

Between 1999 and 2005, Madigan, state, and the federal government alleges the company illegally marketed Risperdal for uses not approved by the U. S. Food and Drug Administration. It was also alleged that they made false statements about the safety and efficiency of the drug and engaged in kickback schemes with healthcare professionals and pharmacist to promote its use to patients not approved by the FDA.

The state further alleged that between 2007 and 2009 the company promoted Invega illegally and made false statements about its safety. The company unlawfully cause false and fraudulent claims to be submitted to or caused purchases by government health care programs, including Illinois' Medicaid program.

Both drugs are anti-psychotic drugs used to treat symptoms of psychotic disorders, such as schizophrenia, paranoia, and bipolar disorder. The investigation of Johnson & Johnson and its subsidiary was the result of four whistle-blower claims filed in the U. S. District Court for the Eastern District of Pennsylvania under the federal False Claims Act and related state statutes.

Janssen Pharmaceuticals Inc. additionally will plead guilty in federal court to a criminal misdemeanor charge of mis-branding 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. The companies also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of the Inspector General, which will closely monitor the company’s future marketing practices. Illinois will receive $23.6 million under the agreement.

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