Pharma company Johnson & Johnson has agreed to pay over $2.2 billion to resolve criminal and civil allegations in the US that it promoted powerful psychiatric drugs for unapproved uses in children, seniors and disabled patients.
The allegations include paying kickbacks to doctors and pharmacies to recommend and prescribe Risperdal and Invega, both anti-psychotic drugs, and Natrecor, which is used to treat heart failure.
"Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardise the public health and take money out of taxpayers' pockets.
The figure includes $1.72 billion in civil settlements with federal and state governments as well as $485 million in criminal fines and forfeited profits.
The agreement is the third-largest US settlement involving a drug-maker, and the latest in a string of legal actions against drug companies allegedly putting profits ahead of patients.
"These companies lined their pockets at the expense of American taxpayers, patients and the private insurance industry," said Attorney General Eric Holder, at a news conference.
In recent years, the government has cracked down on the pharmaceutical industry's aggressive marketing tactics, which include pushing medicines for unapproved, or off-label, uses.
While doctors are allowed to prescribe medicines for any use, drugmakers cannot promote them in any way that is not approved by Food and Drug Administration (FDA).
"Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardise the public health and take money out of taxpayers' pockets," the Attorney General said.
In its plea agreement, J&J subsidiary Janssen Pharmaceuticals admitted that it promoted Risperdal to nursing home practitioners to control erratic behaviour in elderly patients with dementia, a use that is explicitly barred in the drug's label because the drug can increase the risk of stroke and death.
'They drove up costs'
Anti-psychotic drugs are known for their sedative effects and are occasionally used to treat post-traumatic stress disorder, though its use is not approved by the FDA.
In a separate civil complaint, the government alleges Janssen Pharmaceuticals also promoted the drug as a way to control behavioural problems in children and mentally disabled.
The drugmaker allegedly downplayed Risperdal's side effects while also paying kickbacks to the nation's largest long-term care pharmacy to recommend the drug to prescribers.
"They drove up costs for everyone in the health care system and negatively impacted the long term solvency of the central health care programmes like medicare," Eric Holder said.
The off-label prescribing contributed to millions of dollars in spending federal and state health programs like Medicare, Medicaid and the Department of Veterans' Affairs.