A motion filed last week in a potential multi-billion healthcare fraud case against Johnson & Johnson provides another apparent example of how to succeed in business without really complying.
The federal government states in a motion that Alex Gorsky, who is set to become Johnson & Johnson’s next chief executive officer this month, “was actively involved in matters at issue in this case,” which alleges Johnson & Johnson paid kickbacks to induce Omnicare, the nation’s largest nursing home pharmacy, to purchase and recommend Risperdal and other J&J drugs. Gorsky, the government says, “has firsthand knowledge of the alleged fraud.”
The government says Gorsky “also was involved in approving payments to Omnicare under the 2000 Consulting and Services Agreement,” which the government alleges were actually kickbacks.
The government wants to depose Gorsky as part of its litigation in the civil fraud case against Johnson & Johnson, which began with a whistleblower (“qui tam”) lawsuit that the government has joined. Johnson & Johnson is fighting the request.
From 1998 to 2003 – the time period covered by the government’s complaint — Gorsky was vice president of marketing for Johnson & Johnson’s Janssen unit then became president. He was responsible for selling Risperdal, a drug whose biggest customer was Omnicare, according to the government. Sales of Risperdal increased tremendously during that time.
The government’s motion states:
As Vice President of Marketing, and having previously worked closely with J&J’s Medical Development group (which was responsible for developing clinical trial data for Risperdal), he was in a position to know why J&J chose not to inform Omnicare (or members of Janssen’s own sales staff) that, in January 1999, the Food & Drug Administration (‘FDA’) had warned J&J that marketing Risperdal as safe and effective in the elderly would be false and misleading because the drug had not been adequately studied in that population.”
The motion continues:
Likewise, he was in a position to know why J&J did not disclose to Omnicare executives that, in 1999, the FDA had rejected J&J’s attempt to get approval to market Risperdal for treatment of psychotic and behavioral disturbances in dementia (by far the most prevalent use of Risperdal in Omnicare-served nursing facilities) because of inadequate safety data.”
Despite the weight of federal and state investigations of the Risperdal allegations, Johnson & Johnson’s board of directors rewarded Gorsky by selecting him to be the next CEO.
Before he assumes that post on April 26, Johnson & Johnson’s board should explain to investors why it chose for the company’s next CEO someone the government states “was actively involved” in fraudulent matters and “has firsthand knowledge of the alleged fraud.” The public will no doubt be asking whether this major healthcare company needs some healing itself.
Thanks to Pharmalot for posting the government’s motion to compel Gorsky to be deposed.
Tuesday, April 17, 2012
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