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Johnson & Johnson asks judge to dismiss kickbacks complaint

By Denise Lavoie and Linda A. Johnson
Associated Press / October 8, 2010

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Johnson & Johnson yesterday asked a federal judge to dismiss a complaint accusing the company of paying millions in kickbacks so nursing homes would put more patients on its popular schizophrenia medication and other drugs.

The government and two whistle-blowers allege that Johnson & Johnson paid kickbacks for five years to long-term care pharmacy Omnicare Inc., whose pharmacists then recommended that doctors prescribe the schizophrenia drug Risperdal for patients with signs of Alzheimer’s. The drug was later found to increase risk of death in such patients.

US District Judge Richard Stearns, sitting in Boston, heard arguments from lawyers for the government and Johnson & Johnson but did not indicate when he would rule.

Johnson & Johnson, based in New Brunswick, N.J., argued that discounts such as those it gave Omnicare are standard industry practice and do not violate the federal antikickback law or similar state laws, as long as the discounts are properly disclosed.

However, documents filed by whistle-blowers who originally brought the case indicate that physicians who were pushed to switch patients from Risperdal to competing drugs were not told Omnicare was getting rebates from Johnson & Johnson.

Prosecutor Gregg Shapiro said the law does not allow “an agreement to attach strings to the discount.’’

Shapiro said Omnicare, as a result of its contract with Johnson & Johnson, sent faxes to thousands of doctors asking them to switch their patients to Risperdal. Representatives of Omnicare also visited nursing homes to promote the use of Risperdal, he said.

“In order to get rebates, you have to go out and push our drugs,’’ Shapiro described Johnson & Johnson’s contract with Omnicare. He added that the government brought the case because of the “extraordinary amount of money’’ Johnson & Johnson paid to Omnicare.

Documents indicate that Johnson & Johnson’s contracts with Omnicare increased the level of discounts Omnicare received as it boosted the share of the company’s drugs that nursing home patients got, compared with rival companies’ medicines.

William Sarraille, an attorney for Johnson & Johnson, said the government has conceded there is no evidence patients were harmed. The US attorney in Boston earlier this year joined two whistle-blower cases against Johnson & Johnson.

One was filed in 2003 by a former Omnicare pharmacist in Chicago, Bernard Lisitza, who said he was fired after he challenged the Risperdal agreements and other practices. The other was filed by a former Omnicare financial analyst, David Kammerer, in 2005, after he had resigned from the company.