Johnson & Johnson Asks Federal Judge To Toss Kickbacks Case

BOSTON (AP) — Johnson & Johnson on Thursday asked a federal judge to dismiss a complaint accusing the health care giant of paying millions in kickbacks so nursing homes would put more patients on its popular schizophrenia medication and other drugs. The government and two whistleblowers allege that J&J paid kickbacks to long-term care pharmacy Omnicare Inc.

BOSTON (AP) — Johnson & Johnson on Thursday asked a federal judge to dismiss a complaint accusing the health care giant of paying millions in kickbacks so nursing homes would put more patients on its popular schizophrenia medication and other drugs.

The government and two whistleblowers allege that J&J paid kickbacks to long-term care pharmacy Omnicare Inc., whose pharmacists then recommended the schizophrenia drug Risperdal for patients with signs of Alzheimer's. The drug was later found to increase risk of death in elderly dementia patients.

It was not immediately clear when U.S. District Judge Richard Stearns would rule.

J&J, based in New Brunswick, N.J., argued that it gave discounts to Omnicare that did not violate the federal anti-kickback law.

But Assistant District Attorney Gregg Shapiro said the law does not allow "an agreement to attach strings to the discount." He said Omnicare, as a result of its contract with Johnson & Johnson, sent faxes to thousand of doctors asking them to switch their patients to Risperdal. Representatives of Omnicare also visited nursing homes to promote the use of Risperdal, Shapiro said.

William Sarraille, an attorney for Johnson & Johnson, said that the government has conceded that there is no evidence that any patients were harmed. He also said the company viewed its discount agreement with Omnicare as legal under the anti-kickback statute.

"It is absolutely clear that there is nothing unreasonable about the interpretation Johnson & Johnson had of the statute," he said.

The allegations are in a complaint filed by the U.S. Attorney in Boston, whose office has joined two whistleblower cases. One was filed in 2003 by a former Omnicare pharmacist in Chicago, Bernard Lisitza, who says he was fired after he challenged the Risperdal agreements and other practices at the company. The other was filed by former Omnicare financial analyst David Kammerer in 2005, after he resigned from the company.

Documents filed in the case indicate that J&J had contracts with Omnicare that increased the level of discounts the pharmacy company would receive as it boosted the share of Johnson & Johnson drugs nursing home patients got, compared with medicines made by other companies.

Last year, Omnicare agreed to a $90 million settlement with the federal government and numerous states to resolve its liability in the case, according to U.S. Attorney Carmen Ortiz.

The U.S. Attorney's Office in Boston is seeking triple damages, restitution and other penalties from Johnson & Johnson under the federal False Claims Act and other laws. The damages would be based on the amount of false claims charged to Medicaid, which paid for about two-thirds of the claims Omnicare submitted for J&J drugs — possibly hundreds of millions of dollars.

The government alleges the scheme went on from 1999 through 2004, a period when J&J's sales of drugs through Omnicare jumped from about $100 million to more than $280 million. More than one-third of that was sales of Risperdal; the other drugs sold through Omnicare were pain relievers Duragesic and Ultram and an antibiotic, Levaquin.

Soon after that, the Food and Drug Administration required Risperdal to be sold with its most severe, "black box," warning stating that giving Risperdal and similar drugs to elderly patients with dementia-related psychosis increased their risk of death. The warning states the use of Risperdal is not approved for patients with dementia-related psychosis — schizophrenia and other mental illnesses causing delusions and hallucinations.

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Legal Affairs Writer Lavoie reported from Boston and Business Writer Johnson reported from Trenton, N.J.

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