Johnson & Johnson Pays $2 Billion for Misbranding Drugs (on Top of Previous $0.2 Billion)

Johnson & Johnsonsays it settled investigations by the U.S. Department of Justice for approximately $2 billion over marketing of three drugs -- antipsychotics Risperdal and Invega, and heart drug Natrecor -- and over kickbacks it allegedly gave nursing home pharmacy manager Omnicare.

The DOJ says the settlement is closer to $2.2 billion.

The difference seems to be that the DOJ is counting all the claims settled by the investigation while Johnson & Johnson is only announcing new settlements. Johnson & Johnson previously settled with Texas for $118 million, and Johnson & Johnson's subsidiary Scios previously paid an $85 million fine as part of the criminal settlement over marketing of Natrecor.


Most of the new payment -- $1.273 billion -- has to do with the civil settlement in which the states claim that off-label marketing of Risperdal and Invega caused the Medicaid program to pay claims it shouldn't have. Another $149 million has to do with the alleged kickbacks to Omnicare that caused false claims to federal health care programs.

There's also a $400 million fine and forfeiture as part of the criminal investigation into the misbranding, for which Janssen plead guilty to a misdemeanor misbranding charge.

Finally, Johnson & Johnson and Scios are paying $184 million for the civil part of the claims that Natrecor was promoted off label.

Johnson & Johnson already took a charge for the expected settlement, so the payment won't affect future earnings reports.

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The article Johnson & Johnson Pays $2 Billion for Misbranding Drugs (on Top of Previous $0.2 Billion) originally appeared on Fool.com.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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