On November 4, 2013, after nearly six years of litigation, Johnson & Johnson, the self-proclaimed “family company,” agreed to pay $149 million to the federal government, the states of California, Kentucky, Indiana, and Massachusetts, and the Commonwealth of Virginia, to settle Medicaid fraud claims under the False Claims Act. (Johnson & Johnson Press Release)
The qui tam action alleged that pharmaceutical manufacturer Johnson & Johnson paid Omnicare pharmacies kickbacks for switching nursing home patients from their anti-psychotic to the Johnson & Johnson product Risperdal® to significantly increase sales and profits. Omnicare is the largest pharmacy supplying drugs to nursing homes in the United States. The qui tam lawsuit was brought by Chicago whistleblower law firm Behn & Wyetzner, Chartered and led by qui tam lawyers Linda Wyetzner, Michael Behn, and William W. Thomas. The Philadelphia whistleblower law firm of Kenney & McCafferty, P.C. also worked on the case.
The qui tam action was initiated by Chicago pharmacist and whistleblower Bernard Lisitza who was fired by Omnicare after reporting this and other fraudulent schemes to his supervisors. The False Claims Act allows private citizens with knowledge of fraud to file a qui tam action on behalf of the government to recover illegally obtained government money. If the matter is resolved successfully, the individual who brought the action (called a qui tam relator) is eligible for a whistleblower reward.
According to the government and qui tam relator Lisitza, Johnson & Johnson paid huge amounts of money to Omnicare under “market share rebate” agreements, which paid Omnicare according to its success in blanket switching of Risperdal and other drugs to Johnson & Johnson products. Johnson & Johnson also conditioned payment of the rebates upon Omnicare’s attempts to convince physicians to prescribe Risperdal® instead of other anti-psychotic drugs. Omnicare allegedly failed to disclose to physicians that its pharmacists’ recommendations were tied to Johnson & Johnson’s payments. According to the government and qui tam whistleblower Lisitza, Johnson & Johnson’s kickbacks drove Omnicare’s sales of Johnson & Johnson drugs from $100 million in 1999 to $280 million in 2004.
The Johnson & Johnson Medicaid fraud settlement is another successful False Claims Act case handled by Behn & Wyetzner, Chartered. On November 3, 2009, Omnicare paid $98 million to settle Lisitza’s allegations concerning Johnson & Johnson’s Risperdal® payments and other alleged kickbacks. In 2006, Omnicare settled another qui tam lawsuit by pharmacist relator Lisitza that recovered nearly $50 million for the United States and 43 states. And in 2008, Behn & Wyetzner, Chartered represented qui tam whistleblower Lisitza in a $37 million Medicaid fraud settlement with CVS pharmacies, and a $35 million Medicaid fraud settlement with Walgreens.
The complaint as well as other court documents filed by Lisitza in the Johnson & Johnson matter and other qui tam actions can be found here.
In executing the Settlement Agreement, Johnson & Johnson denied liability, wrongdoing or improper conduct.