J&J Unit Rejected by U.S. High Court on Procrit Kickback Suit

The U.S. Supreme Court rejected an appeal by a Johnson & Johnson unit, refusing to stop a lawsuit by a former sales representative who says the company gave doctors kickbacks for prescribing its Procrit anemia drug.

The suit, filed under a whistleblower law known as the U.S. False Claims Act, says that kickbacks paid by J&J’s Ortho Biotech Products unit led to inflated reimbursements under the federal Medicare program for the elderly and disabled.

Ortho contended in its appeal that whistleblower Mark Eugene Duxbury couldn’t sue because similar allegations had already been disclosed in a previous lawsuit. The False Claims Act lets whistleblowers sue on behalf of the federal government and then share in any recovery.

In rejecting the appeal, the justices took the advice of the Obama administration, which told the court that recent changes in the False Claims Act would limit the practical significant of the case.

A federal appeals court in Boston said Duxbury could pursue his suit, filed in November 2003. The panel said Duxbury met the law’s requirement that he be an “original source” of the allegations because he provided the government with his information about the company before filing suit.

Ortho argued that Duxbury should have informed the government before other plaintiffs filed an earlier lawsuit. The company’s appeal had the support of the American Hospital Association.

J&J is based in New Brunswick, New Jersey.

The case is Ortho Biotech v. United States ex rel. Duxbury, 09-654.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

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