Johnson & Johnson Pays $2 Billion for Misbranding Drugs (on Top of Previous $0.2 Billion)

Johnson & Johnson (NYSE: JNJ  ) says it settled investigations by the U.S. Department of Justice for approximately $2 billion over marketing of three drugs -- antipsychotics Risperdal and Invega, and heart drug Natrecor -- and over kickbacks it allegedly gave nursing home pharmacy manager Omnicare.

The DOJ says the settlement is closer to $2.2 billion.

The difference seems to be that the DOJ is counting all the claims settled by the investigation while Johnson & Johnson is only announcing new settlements. Johnson & Johnson previously settled with Texas for $118 million, and Johnson & Johnson's subsidiary Scios previously paid an $85 million fine as part of the criminal settlement over marketing of Natrecor.

Most of the new payment -- $1.273 billion -- has to do with the civil settlement in which the states claim that off-label marketing of Risperdal and Invega caused the Medicaid program to pay claims it shouldn't have. Another $149 million has to do with the alleged kickbacks to Omnicare that caused false claims to federal health care programs.

There's also a $400 million fine and forfeiture as part of the criminal investigation into the misbranding, for which Janssen plead guilty to a misdemeanor misbranding charge.

Finally, Johnson & Johnson and Scios are paying $184 million for the civil part of the claims that Natrecor was promoted off label.

Johnson & Johnson already took a charge for the expected settlement, so the payment won't affect future earnings reports.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2712211, ~/Articles/ArticleHandler.aspx, 7/30/2014 7:58:14 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.