Whistleblowers exposed illegal marketing of Risperdal; largest settlement to date

INDIANAPOLIS – In its largest-ever settlement of a Medicaid fraud case, the State of Indiana will receive nearly $17 million from Johnson & Johnson and its subsidiaries to resolve lawsuits alleging the pharmaceutical manufacturer engaged in illegal off-label marketing and payment of kickbacks to promote its drugs Risperdal and Invega, among others.

The repayment by Johnson & Johnson and its subsidiaries to the Indiana Medicaid program is part of a larger $2.2 billion settlement reached with other states and the federal government for J&J’s alleged defrauding of the Medicaid, Medicare and other healthcare programs, by causing false claims to be submitted for reimbursement and then paid.  The global settlement resolves four separate whistleblower lawsuits in federal court in Pennsylvania under the False Claims Act and one in federal court in Massachusetts alleging violations of the Anti-Kickback Statute.  J&J also will plead guilty to a federal criminal charge of drug misbranding.

“Through the help of whistleblowers who used the False Claims Act to expose illegal billings and stop fraud against the Medicaid program, our state will recover a record amount from a drug company to reimburse Indiana for tax dollars wrongly paid out,” Indiana Attorney General Greg Zoeller said.

The Attorney General’s Medicaid Fraud Control Unit or MFCU investigates fraudulent claims against Medicaid, the state-federal medical program for low income Hoosiers that covers costs of many types of prescription drugs.  Prior to today’s settlement, the Attorney General’s Office since January 2009 had recovered nearly $37 million in settlements with drug companies for illegal off-label marketing and returned it to the Indiana Medicaid program.

The settlement with Johnson & Johnson involves multiple settlement payments:

• In the Pennsylvania cases, Indiana will receive $12.6 million to resolve allegations that J&J subsidiary Janssen Pharmaceuticals illegally marketed the drug Risperdal from 1999 to 2005, and that another subsidiary, Ortho-McNeil-Janssen, illegally marketed Invega, a drug that replaced Risperdal, from 2007 to 2009.
• In the Massachusetts case, Indiana will receive $4.35 million, plus the costs of bringing the suit, to resolve allegations that Johnson & Johnson paid illegal kickbacks or other illegal remuneration to Omnicare Inc., a long-term pharmacy, for promotion of Risperdal and other drugs, which caused Omnicare to submit false claims to the Indiana Medicaid program for reimbursement.

In total, the Indiana Medicaid program will receive $16.9 million for its state share of the settlements of the two sets of cases – the largest amount Indiana has received in such a settlement in an illegal drug-marketing case.  When the federal recovery specific to Indiana included, the two settlements total $44.5 million in combined federal and state money for the Indiana Medicaid program, the largest such amount the program has received.

Risperdal is a drug approved to treat certain symptoms in patients with mental disorders, such as schizophrenia and bipolar disorder.  Invega is the drug that replaced Risperdal when it went off-patent. While it is not illegal for physicians to prescribe drugs for uses other than those FDA has approved, it is illegal for drug manufacturers to promote or market their drugs for unapproved uses.  The lawsuits allege the J&J companies engaged in a pattern of paying illegal remuneration to physicians and long-term care pharmacies to induce them to promote Risperdal and other J&J drugs — instead of generic drugs at lower cost — for uses for which the drugs were not proven safe and effective, such as for pediatric patients or elderly patients suffering from dementia.

The drug manufacturer also will plead guilty to a criminal charge of drug misbranding the U.S. Department of Justice filed. Whistleblowers who originally brought the lawsuits that the states and federal government joined will receive various percentages of the recovery.

Under the state and federal versions of the False Claims Act, whistleblowers with knowledge of fraud against a government contract can file a private lawsuit on behalf of the government.  Typically such whistleblower lawsuits – also called “qui tam” lawsuits — are sealed temporarily so that the government may investigate the allegations. If the government intervenes, the suit is eventually unsealed and at the end of the litigation, the whistleblower can receive a portion of any financial recovery.

Today’s $16.9 million settlement boosts the Attorney General’s state-level recovery of Medicaid funds through settlements of lawsuits against drug companies to nearly $54 million since January 2009.

“This record recovery helps restore funds to the Indiana Medicaid program, but it is extremely disappointing to see a drug company overbilling and wrongly billing the Medicaid program for ineligible claims.  Now J&J must face the legal consequences,” Zoeller said.  He thanked the Medicaid Fraud Control Unit and Deputy Attorney General Lawrence Carcare for many months of effort on the J&J investigation and settlement.

This Medicaid fraud settlement with J&J is in addition to a previous recovery of $4.5 million that Indiana received in August 2012 from J&J subsidiary Janssen Pharmaceuticals for illegal off-label marketing of Risperdal, Invega and other drugs.

Fraud against the Medicaid program can be reported to the Attorney General’s Office at 1-800-382-1039.

NOTE:  More information about how whistleblowers can file qui tam lawsuits under the False Claims Act is at this link:http://www.in.gov/attorneygeneral/2807.htm

Information about Indiana’s earlier settlement of $4.5 million with a J&J subsidiary is at this link:
http://www.in.gov/activecalendar/EventList.aspx?fromdate=1/1/2012&todate=12/31/2012&display=Month&type=public&eventidn=58633&view=EventDetails&information_id=118331

Connie,

There has been some confusion regarding our supposedly increase in the City Council budget. Obviously, there are some on council that do not have the proper knowledge in interpreting the sources of our funding. In order to properly interpret  our budget, one has to derive the total funding from two locations. The first is Fund 4 account number 1011401 and second is fund 907 account number 4745801. For everyone convenience, I have attached copies of those sources. As such, please note that account 1011401 for 2013 was $476,163 and account 4745801 for 2013 was $125,500, totaling $601,663 for 2013.  In review of the 2014 budget, account 1011401 for 2014 is $583,091.60 and account 4745801 for 2014 is now only $15,000, totaling $598,091.60 for 2014.

Now, I assume that everybody can do this simple math problems: $598,091.60, total budget for 2014 less $601,663.00 total budget for 2013 = $-3,571.40 Divided by $601,663.00 total for 2013 = .59% decline in our budget for 2014. So, if anybody voted against the overall budget due to an alleged 22% increase, please consult the finance chair prior to the vote next time.  As I recall, I made it a point to contact each and everyone of you the Monday afternoon before council  asking  if you had any concerns and nothing about our supposedly increase in the City Council budget was mentioned. I regret if any  of your constituents were mislead by not understanding the proper sources of our budget.

Why the administration chose to confuse the issue by transferring the normal funding from account 4745801 to 1011401 and the result, confusion to the masses, only they can answer.

In the future, please do not hesitate to consult with me regarding any aspect of our budget.

John Friend, CPA

5th Ward City Council Member and Budget Chairman

Click below to open budget  documents  then you may print it out for review:

City Council Budget – 2014 copy 2

POSTED BY CITY COUNTY OBSERVER WITHOUT BIAS, OPINION AND OR EDITING