Court reinstates J&J kickback case

By Associated Press
August 14, 2009

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TRENTON, N.J. - A federal appeals court has revived a multibillion Medicare fraud case brought by whistle-blowers alleging Johnson & Johnson paid doctors kickbacks to prescribe an expensive drug to boost sales.

Two former salespeople for the health care giant have alleged that J&J’s Ortho Biotech Products unit, which sells the anemia drug Procrit, gave doctors kickbacks to write prescriptions for the blockbuster drug during the 1990s. Most of the prescriptions were covered by the federal Medicare program.

Jan Schlichtmann, attorney for the former salesmen, said Ortho Biotech ran “an extensive scheme’’ in which doctors were given free Procrit, honoraria, speaking fees, “off-the-invoice discounts,’’ and other monetary inducements to give their patients Procrit, particularly after the drug faced competition from rival Amgen Inc.’s Aranesp.

“Everybody got these discounts. It wasn’t an exception. This was how this drug was marketed and sold,’’ Schlichtmann, a lawyer who won a water contamination case in Woburn., Mass., said.

Johnson & Johnson spokesman Bill Foster said one of the two main claims in the suit was dismissed by the appeals court. “We are pleased with the Court of Appeals decision (on that claim) and will vigorously defend against the remaining allegations,’’ Foster said. “We intend to seek dismissal of this last remaining claim.’’

Procrit, often prescribed to treat anemia in patients being treated for cancer or AIDS or undergoing kidney dialysis, is a top seller for Johnson & Johnson. The company reported sales of $2.5 billion last year for Procrit and Eprex, as it is known in some countries, down from $3.2 billion in 2006. It currently is J&J’s third-best-selling drug.

Late Wednesday, the US Court of Appeals for the First Circuit in Boston reinstated part of the whistle-blower lawsuit brought by former Johnson & Johnson sales representatives Mark Duxbury and Dean McClellan. The appeals court sent that part of the case, dealing with doctor kickbacks, back to the original court that had dismissed the case, US District Court in Boston.