J&J Subsidiaries, Schwarz Pharma, Settle Separate Whistleblower Suits

John Commins, April 29, 2010

Johnson & Johnson subsidiaries Ortho-McNeil Pharmaceutical LLC, and Ortho-McNeil-Janssen Pharmaceuticals Inc. will pay more than $81 million to resolve criminal and civil whistleblower allegations that they promoted the off-label use of the epilepsy drug Topamax, the Justice Department announced today.

In a separate whistleblower settlement also announced today, DOJ said Schwarz Pharma Inc. will pay $22 million to resolve False Claims Act allegations that the company didn’t tell the Centers for Medicare and Medicaid Services that two unapproved products did not qualify for federal reimbursements.

Ortho-McNeil will 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 approved Topamax as an anti-epileptic drug, but not for psychiatric use.

The government alleged that Ortho-McNeil Pharmaceutical promoted Topamax for off-label psychiatric uses through a “Doctor-for-a-Day” program that hired outside physicians to visit other healthcare providers and encourage prescribing Topamax for unapproved uses.

Ortho-McNeil-Janssen will pay $75.4 million to resolve civil allegations that their off-label promotion of Topamax caused false claims to be submitted to government healthcare programs for psychiatric uses that were not reimbursable. The federal share is $50.6 million, and the state Medicaid share is $24.6 million. The whistleblowers will get more than $9 million from the federal share.

Ortho-McNeil-Janssen Pharmaceuticals will enter a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. The settlement with Schwarz, now a subsidiary of Belgium-based UCB S.A., resolves allegations that the company submitted false quarterly reports to the government about the drugs Deponit, a nitroglycerin skin patch, and Hyoscyamine Sulfate Extended Release, an antispasmodic medication for stomach, intestinal, and urinary tract disorders. Federal prosecutors said Schwarz misrepresented the regulatory status of both drugs and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal healthcare programs.

The federal share of the settlement is $12.2 million, and the state Medicaid share is $9.7 million. Two whistleblowers in the settlement will get $1.8 million.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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