May 21 (Bloomberg) -- A Johnson & Johnson unit admitted it illegally marketing its Topamax epilepsy drug for other ailments, fulfilling part of an $81 million settlement reached in April with the government.
Officials of Johnson & Johnson’s Ortho-McNeil Pharmaceutical LLC pleaded guilty today in federal court in Boston to a misdemeanor charge of selling a misbranded drug. The company agreed to pay a $6.14 million criminal fine.
While the Food and Drug Administration approved Topamax for the treatment of some epileptic seizures, Ortho-McNeil promoted the drug for unapproved psychiatric uses, such as bipolar disorder and drug and alcohol dependence, the government said in court filings. Although doctors may prescribe drugs for uses not approved as safe and effective by the government, companies are forbidden to market them for the so-called off-label uses.
“The agreement is a fair disposition of the criminal conduct alleged,” U.S. Magistrate Judge Robert B. Collings told Ortho-McNeil executives before accepting the plea today.
As part of its plea deal, Ortho-McNeil also pledged to adopt a corporate integrity agreement designed to bar the company from engaging in further illegal marketing practices, Collings said. Ortho-McNeil-Janssen Pharmaceuticals, another Johnson & Johnson unit, will pay $75.37 million to resolve the government’s civil claims that it encouraged off-label sales.
“It’s a fair result,” Robert Ullmann, a lawyer representing Ortho-McNeil, said in an interview after today’s hearing.
$1.15 Billion Sales
Topamax lost patent protection in March 2009 and sales dropped 58 percent to $1.15 billion last year from $2.7 billion in 2008, according to J&J’s annual report.
Epilepsy drug sales topped $10.2 billion in the U.S. in 2007, led by Topamax and GlaxoSmithKline Plc’s Lamictal, according to the research firm IMS Health Inc.
Johnson & Johnson captured about 21 percent of the epilepsy drug market through Topamax sales, IMS officials said. To drive sales, the company hired physicians through its “Doctor-for-a-Day” program to join sales representatives in visiting physicians and to speak to colleagues about unapproved uses and doses, prosecutors alleged.
Participating physicians were paid as much as $3,000 a day plus expenses for the visits and talks, the government said in court filings. One neurologist made $500,000 for appearing before doctors about 200 times, according to the filing.
Having the private physicians on hand allowed Ortho-McNeil officials to engage in off-label marketing, the government contends. Internal documents show company executives told doctors that their colleagues “can talk to you about things I can’t talk to you about,” prosecutors said in the filing.
“This case should send a strong reminder that the off-label promotion of pharmaceuticals is illegal, whether it is done directly by company employees or through programs such as the doctor for a day program,” U.S. Attorney Carmen Ortiz in Boston said in an e-mailed statement.
Michelle Ryan, Ortho-McNeil-Janssen’s treasurer, appeared on behalf of the Johnson & Johnson units in court today. She declined Collings’s offer to make a statement on behalf of the drugmakers.
Collings said the plea and fine shouldn’t be considered “just a cost of doing business” by the Johnson & Johnson unit. The company’s actions amounted to “criminal activity,” the judge added.
“The company has taken appropriate action with this settlement agreement and is fully committed to meeting its requirements,” Greg Panico, a spokesman for Ortho-McNeil-Janssen, said in an interview today.
The settlement also resolved lawsuits filed in 2003 and 2004 under the False Claims Act, which lets citizens with knowledge of fraud sue on behalf of the government and share in a recovery. Since January 2009, the U.S. has recovered $3 billion in False Claims Act cases, including $2.2 billion in health care cases.
The case is US v. Ortho-McNeil Pharmaceutical LLC, 10-CR-10147, U.S. District Court, District of Massachusetts (Boston).
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