The US has filed a civil False Claims Act complaint against pharmaceutical giant Johnson & Johnson (J&J) and two of its subsidiaries for allegedly paying millions in kickbacks to persuade nursing homes to use their drugs.
The complaint alleges that J&J and subsidiaries Ortho-McNeil-Janssen Pharmaceuticals and Johnson & Johnson Health Care Systems paid kickbacks to Omnicare, the largest US nursing home drug dispensary, to purchase and recommend J&J drugs including the anti-psychotic drug Risperdal.
It is believed that J&J paid the kickbacks to influence Omnicare's pharmacists as an "extension of the sales force" to recommend their products to physicians, knowing that they would be accepted more than 80% of the time.
The court also alleges that Jamp;J paid these kickbacks in several ways. The complaint alleges that Omnicare was entitled to increasing levels of rebates from Johnson & Johnson as long as Omnicare implemented specific programmes to increase J&J prescriptions.
J&J is also alleged to have paid Omnicare millions of dollars for "data", much of which Omnicare never provided. Thirdly, the company is also accused of making substantial payments to Omnicare, calling them "grants" and "educational funding", even though their true purpose was to induce Omnicare to recommend J&J drugs.
Department of Justice Civil Division assistant attorney general Tony West said that kickbacks such as those alleged distort the judgments of healthcare professionals and put profits ahead of sound medical treatment.
"We will pursue those who break the law to take advantage of the elderly and the poor," West said.
The complaint against Omnicare was settled through a $98m settlement in November 2009.