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Last November, the Department of Justice reached a $98 million settlement agreement with Omnicare, Inc., the nation's largest pharmacy specializing in prescribing for nursing home patients, over alleged kickbacks in violation of the False Claims Act. On January 15, the Dept. of Justice announced it is filing suit against the other member in the alleged kickback scheme, Johnson & Johnson and its subsidiaries, Ortho-McNeil-Janssen Pharmaceuticals Inc., and Johnson & Johnson Health Care Systems Inc.
The DOJ announced in a recent press release that it has filed suit, under the False Claims Act (as with Omnicare), against J&J and its subsidiaries, for what it alleges is a system of kickbacks designed to entice Omnicare pharmacists to recommend J&J drugs for patients in the nursing homes that it serves. According to the complaint, Omnicare pharmacists reviewed nursing home patients' charts "at least monthly" and made recommendations to physicians for J&J drugs which were followed more than 80% of the time. In fact, the government alleges that the recommendations by pharmacists were so pervasive and well received that Johnson actually viewed the pharmacists as an "extension of [J&J’s] sales force."
Among the types of inducements J&J was alleged to have offered Omnicare were increasing levels of rebates based on how many programs Omnicare implemented to increase the number of J&J drugs prescribed, payment for data that never materialized, "grants" and educational funding which were merely further payment for recommending the company's products.
Under its settlement with the government, Omnicare has admitted no wrongdoing.
Johnson & Johnson issued a statement denying the allegations and stating in part, "We believe airing the facts will confirm that our conduct, including rebating programs like those the government now challenges, was lawful and appropriate. We look forward to the opportunity to present our evidence in court."