JNJ to pay $2.2B to settle Risperdal, Omincare, Natrecore, Invega probes - Boston Business Journal

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In April, U.S. officials asked a federal judge in Boston to compel Johnson & Johnson CEO Alex Gorsky to testify concerning allegations the company paid kickbacks to Omnicare, a nursing home drug services company, to influence distribution of its antipsychotic drug, Risperdal.

Galen Moore

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Johnson & Johnson    Johnson & Johnson Latest from The Business Journals Astute Medical raises millionSkyline Construction hires new presidentJohnson & Johnson Development, others increase PhaseBio stake Follow this company (NYSE: JNJ) will reportedly pay $2.2 billion to end a probe into sales of its antipsychotic drug Risperdal and other medications. A settlement could be announced as early as this week.

Johnson & Johnson on June 8 announced it would set aside $600 million to settle civil claims related to its marketing of Risperdal, a heart failure drug, Natrecor, and an antipsychotic medication, Invega. The Risperdal probe goes back to 2004.

The reported settlement deal would be the second largest with the U.S. government, after a $2.3 billion agreement Pfizer Inc.    Pfizer Inc. Latest from The Business Journals Pfizer to spin off animal health unitPfizer to spin off animal health biz; Durham impact unknownPfizer to spin off animal health unit; Durham impact unknown Follow this company (NYSE: PFE) struck in 2009 to settle an investigation of improper drug marketing related to its Bextra painkiller.

It would include a criminal penalty of as much as $600 million, as well as a misdemeanor plea, according to a Bloomberg report quoting unnamed sources. The deal would also resolve civil claims against J&J, alleging kickbacks to Omnicare Inc. (NYSE: OCR), a health care services company that dispenses drugs in nursing homes.

In April, Justice Department lawyers asked a federal judge in Boston to compel Alex Gorsky, Johnson & Johnson's new CEO, to testify about the alleged kickbacks to Omnicare.

The $2.2 billion doesn't cover damages or fines totaling about $1.8 billion in Arkansas, Louisiana and South Carolina, Bloomberg reported, where Johnson & Johnson is appealing or says it plans to appeal judgments related to misleading Risperdal marketing campaigns.

Risperdal was once Johnson & Johnson's best selling drug, generating $24.2 billion in sales from 2003 to 2010, according to Bloomberg.

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