Johnson & Johnson to Pay $2.2 Billion Settlement Tied to Nursing Home Kickbacks

Healthcare giant Johnson & Johnson and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability stemming from allegations it participated in off-label marketing and kickbacks to doctors and pharmacists, including those in the long-term care industry, the Justice Department announced Monday.

The settlement includes a $149 million payment to settle allegations that Johnson & Johnson and its subsidiary Janssen Pharmaceuticals Inc. targeted elderly dementia patients in nursing homes and paid kickbacks to Omnicare Inc., the nation’s largest long-term care pharmacy to promote its products. 

Johnson & Johnson paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants,” and “educational funding,” the United States alleged in a January 2010 complaint filed in the District of Massachusetts. 


The kickbacks were in place to encourage Omnicare and its consultant pharmacists to participate in “active intervention programs” to promote the use of Risperdal and other Johnson & Johnson drugs in nursing homes, according to the Justice Department. However, the companies downplayed “serious health risks” associated with Risperdal, including risk of stroke in seniors, said Attorney General Eric Holder in a press conference on the settlement. 

“As part of this scheme, the companies allegedly paid kickbacks to the nation’s largest long-term care pharmacy, whose pharmacists were supposed to be the gatekeepers to provide an independent review of patient medications,” Holder said. “Instead, at the companies’ behest, the pharmacists allegedly recommended Risperdal for nursing home patients who exhibited behavioral symptoms associated with Alzheimer’s disease and dementia. This alleged conduct resulted in government health care programs paying millions of dollars in false claims for these drugs.”

Johnson & Johnson and its pharmaceutical subsidiary have agreed to pay the $149 million settlement to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal healthcare programs like Medicare. The federal share of this payment is $132 million, while the five participating states will get a total of $17 million


In 2009, Omnicare paid $98 million to resolve its civil liability for claims it accepted kickbacks from Johnson & Johnson and Janssen, along with other conduct issues. Omnicare also recently agreed to a $120 million settlement resolving claims it accepted illegal kickbacks in the form of drug discounts to certain long-term care communities in exchange for resident referral business. 

“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”

Read Holder’s remarks on the Johnson & Johnson settlement, which is one of the largest healthcare fraud settlements in U.S. history. 

Written by Alyssa Gerace 

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