Johnson & Johnson Charged with Kickbacks

Federal prosecutors have charged pharmaceutical company Johnson & Johnson with paying tens of millions of dollars to Omnicare Inc as an inducement to buy their products and recommend them to nursing homes. The payments were made from 1999 to 2004 when Omnicare purchases tripled to $280 million. The federal complaint alleges that a “substantial portion” of these were charged to Medicaid.
According to the Wall St. Journal, “Omnicare was in a unique position to encourage sales of preferred products, prosecutors said. The company’s pharmacists reviewed the medical charts of nursing-home patients monthly and their drug recommendations were followed by doctors more than 80% of the time, they said.
In November, Omnicare agreed to pay $89 million to settle charges related to the alleged kickback scheme. IVAX Pharmaceuticals, a unit of Teva Pharmaceutical Industries Ltd., agreed to pay $14 million to settle related allegations.”