State Settles With Johnson & Johnson Over Kickback Scheme With Former Covington Corporation
Kentucky Attorney General Jack Conway announced Tuesday that Kentucky has settled Medicaid claims against pharmaceutical giant Johnson and Johnson (J&J) and its subsidiaries Johnson and Johnson Health Care Systems and Jansen Pharmaceuticals.
The Medicaid claims arose from allegations that J&J paid kickbacks to Omnicare Inc., the nation's largest pharmacy specializing in dispensing drugs to nursing home patients. Omnicare was based in Covington at the time but has since moved to Cincinnati.
In January of 2010, a civil case was filed in U.S. District Court in Massachusetts alleging that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market-share rebates, data-purchase agreements, grants and educational funding, to entice Omnicare and its consultant pharmacies to promote the use of the anti-psychotic drug Risperdal and other J&J drugs in nursing homes. As a result, Omnicare consultant pharmacists reviewed nursing home patient charts and made recommendations to physicians on what drugs should be prescribed to their patients. This resulted in Omnicare submitting what the federal government alleged were false claims to federal medical programs, including Medicaid. Five states, including Kentucky, joined this lawsuit.
“Often, physicians rely on consultant pharmacies to provide independent recommendations and advice,” Conway said in a news release. “The payment of kickbacks to promote the use of a drug which might not be appropriate for a particular nursing home patient is unacceptable and it’s against the law.”
The Kentucky Medicaid program will receive more than $2 million and the federal government will receive $4.9 million for its share of Kentucky-related damages.
In November 2009, the federal government, numerous states, including Kentucky, and Omnicare entered into a $98 million settlement agreement that, among other things, resolved Omnicare’s civil liability under the False Claims Act for taking kickbacks from J & J.
The Attorney General’s Tip Line for reporting allegations of Fraud is 877 ABUSE TIP (877-228-7384).
Source: news release