Johnson & Johnson subsidiaries agree to pay over $81M to resolve Topamax illegal promotion allegations

Epilepsy Drug Approved by FDA Promoted for Psychiatric Uses

American pharmaceutical manufacturers Ortho-McNeil Pharmaceutical LLC and Ortho-McNeil-Janssen Pharmaceuticals Inc., both subsidiaries of Johnson & Johnson, have agreed to pay more than $81 million to resolve criminal and civil liability arising from the illegal promotion of the epilepsy drug Topamax, the Justice Department announced today.

According to the agreement reached with the government, Ortho-McNeil Pharmaceutical LLC has agreed to plead guilty to a misdemeanor and pay a $6.14 million criminal fine for the misbranding of Topamax in violation of the Food, Drug and Cosmetic Act.  The Food and Drug Administration (FDA) approved Topamax as an anti-epileptic drug, for the treatment of partial onset seizures, but not for any psychiatric use.  Once a pharmaceutical is approved by the FDA, a manufacturer may not market or promote it for any use not specified in its new drug application.  The unauthorized uses are also known as "unapproved" or "off-label uses."

The government alleged that Ortho-McNeil Pharmaceutical promoted the sale of Topamax for off-label psychiatric uses through a practice known as the "Doctor-for-a-Day" program.  Using this program, Ortho-McNeil hired outside physicians to join sales representatives in their visits to the offices of health care providers and to speak at meetings and dinners about prescribing Topamax for unapproved uses and doses.

In addition to the criminal fine, Ortho-McNeil-Janssen Pharmaceuticals will pay $75.37 million to resolve civil allegations under the False Claims Act that they illegally promoted Topamax and caused false claims to be submitted to government health care programs for a variety of psychiatric uses that were not medically accepted indications and therefore not covered by those programs.  The federal share of the civil settlement is $50,688,483.52, and the state Medicaid share of the civil settlement is $24,681,516.48.

"Working with our federal and state partners, we will take action against pharmaceutical companies that promote their drugs for off-label uses," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.  "This type of unlawful marketing undermines the FDA's important role in deciding which drugs are safe and effective for consumers and costs the taxpayers billions of dollars each year."

The civil settlement resolves two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions behalf of the United States and share in any recovery.  The two cases, both filed in the District of Massachusetts are United States ex rel. Maher, et al. v. Ortho-McNeil Pharmaceutical, Civil Action No. 03-11445-WGY, and United States ex rel. Spivack v. Johnson & Johnson and Ortho-McNeil Pharmaceutical, Inc., Civil Action No. 04-11886-WGY.  As part of today's resolution, the whistleblowers will receive payments totaling more than $9 million from the federal share of the civil recovery. 

Also as part of the settlement, Ortho-McNeil-Janssen Pharmaceuticals has agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.  That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.

"This resolution underscores the government's unflagging commitment to combating pharmaceutical fraud in all its forms, and in securing a just and meaningful outcome that deters those who would consider off-label marketing in the future," said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts.

"This settlement is about more than financial recoveries, it is also about protecting the integrity of health care programs and the health of beneficiaries," said Department of Health and Human Services Inspector General Daniel R. Levinson. "The Corporate Integrity Agreement requires Ortho-McNeil-Janssen-Pharmaceuticals, Inc. to increase transparency and accountability and to make changes designed to avoid illegal drug promotion in the future."

The Justice Department's Civil Division and the U.S. Attorney's Office for the District of Massachusetts prosecuted the criminal case and handled the civil lawsuit, with assistance from the National Association of Medicaid Fraud Control Units and the offices of various state Attorneys General.  The Office of Inspector General of the Department of Health and Human Services negotiated the Corporate Integrity Agreement.   

This settlement is part of the government's emphasis on combating health care fraud.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.