Friday, April 13, 2012

Once More with Feeling - Johnson and Johnson Found Guilty, Fined $1.1 Billion

The latest legal black eye for giant pharmaceutical and device company Johnson and Johnson appeared in an Arkansas court room.  As documented by Bloomberg, via,
Johnson & Johnson was ordered to pay $1.1 billion by a state judge after an Arkansas jury found the company’s officials misled doctors and patients about the risks of the antipsychotic drug Risperdal.

Jurors in Little Rock yesterday said the company’s marketing campaign also violated consumer-protection laws. The panel deliberated about three hours before finding J&J and its Janssen unit engaged in 'false or deceptive acts' by sending a 2003 letter touting Risperdal as safer than competing drugs to more than 6,000 doctors across the state.

The prosecutors had alleged a variety of kinds of deceptions about Risperdal,
Along with contending that J&J and Janssen defrauded the Medicaid program by failing to properly outline the antipsychotic medicine’s risks, Arkansas officials alleged J&J officials deceptively marketed the drug as safer and better than competing medicines.

The state also argued the companies marketed the drug for 'unapproved uses, including various symptoms in children and the elderly' after being warned by federal authorities to halt such sales.

In summary,
Arkansas Attorney General Dustin McDaniel said in an e- mailed statement that he sued because residents in the state deserved to be protected from 'fraud and deceptive practices.'

He said that jurors found 'Johnson & Johnson and Janssen Pharmaceuticals lied to patients and doctors because they cared more about profits than people.'

Bloomberg noted that
It’s the third jury verdict against J&J, the second-biggest maker of health products, in cases where states alleged it hid Risperdal’s risks and tricked Medicaid regulators into paying more than they should have for the medicine. Louisiana and South Carolina juries also found the company’s Risperdal marketing violated consumer-protection laws.

In fact, this is just the latest in a remarkable string of legal cases suggesting an ongoing pattern of unethical and illegal behavior by this very large health care corporation. As we wrote recently, this included
- Convictions in two different states in 2010 for misleading marketing of Risperdal, as noted above
- A guilty plea for misbranding Topamax in 2010
- Guilty pleas to bribery in Europe in 2011 by J+J's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses in 2011 (see this link for all of the above)
- Accusations that the company, which makes smoking cessation products, participated along with tobacco companies in efforts to lobby state legislators (see post here)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)
- More recently, in 2012, testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
- Most recently, there are reports that the company is in negotiation with the US Department of Justice to settle other lawsuits about the marketing of Risperdal, perhaps for as much as $1.8 billion (see this BusinessWeek story.)

Meanwhile, as we also discussed recently, Johnson and Johnson seems to have lost the ability to manufacture high quality products. It has had to make 30 separate product recalls since 2009. The latest was Liquid Infant Tylenol. (The current WSJ Health Blog list of recalls can be found here.)

So the real question here is how many instances of manufacturing of defective, mislabeled, contaminated, or harmful products, and how many court cases showing unethical or illegal behavior will it take until the leadership and governance of this company improves (and by extension, the leadership and governance of other large health care corporations with similar bad records improves).

As we posted not long ago, the CEO who presided over most of these messes will be allowed to retire with a huge golden parachute.  His devotion to "making the numbers," that is, hitting short-term revenue targets ahead of all other goals, probably had something to do with a company once thought of as a paragon of corporate behavior turning so bad.  Yet he became extremely rich doing this, and neither his riches nor his legal status have ever been challenged.  His successor apparently will be another former sales representative who may be just as devoted to "making the numbers,."  Thus has the business school dogma that short-term financial results, prettied up as "shareholder value," is the only thing that should matter to corporate leadership (look here) poisoned health care.

How many more doctors and patients have to be deceived, how many products have to be contaminated or defectively made before we demand better leadership of health care organizations?  


Anonymous said...

“How many more doctors and patients have to be deceived, how many products have to be contaminated or defectively made before we demand better leadership of health care organizations? “

Troubling is that this will not receive coverage in the more main stream media, and this is not the first $1B+ settlement in the last few years. Equally troubling is the reaction in the medical community who will continue to write prescriptions with little or no knowledge of what they are prescribing, all based on the word of an attractive person, with no medical background.

I was shocked when I broached this subject on another blog and the doctors all claimed they were not responsible. The FDA was responsible. The drug company was responsible. The drug rep was responsible, even the medical journals were responsible, but they were not responsible. Yet no drug is prescribed in this country without a doctor’s signature.

There is also the learned ignorance of the true cost of medical treatment. Transportation to and from the doctor’s office, the often time off for a driver, and associated cost often dwarf the cost of the co-pay and prescription.

In reading a debate about the use of a drug on another blog I had to think of Scot and how anything negative is anecdotal while the wildest claims become fact. Part of the defense of the drug was the low generic cost, where once again the true economic costs of the drug were ignored. These were doctors who in defending the drug gave no real evidence of effectiveness, only that it had to be “good.”

Long ago I started using the term “feed the monster” to describe our modern medical system. The true economic cost to the patient, their insurance, and employer are ignored in an attempt to game the system for a small percentage of the funds being spent.

AOPA and the EAA, along with other pilot organizations, have requested an expansion of the Recreational Pilots certificate. This will allow pilots to fly under certain restrictions with no medical. There is no evidence this should not be allowed. None, noting is gained by this requirement.

This is not the first time this issue has been brought forward. During the Clinton Administration the same proposal was put forth only to be denied by a doctor’s group claiming financial hardship. The FAA has spent tens of millions of dollars maintaining this system. Pilots have spent hundreds of millions of dollars complying with this system; all the while many in the corporate medical community openly state required test are a way to generate revenue.

Pilots have been forced into repeated invasive test well outside the realm of the required physical to maintain their pilot’s license.

Feeding the monster has become the goal of medicine. The patient’s needs or wants become secondary to that mantra. Billion dollar fines are the cost of doing business and doctors simply are becoming more and more a part of a system whose only goal is to feed the monster.

Steve Lucas

Judy B said...

Steve, you are describing "cognitive dissonance" with regard to the doctors' excuses. I do not think that we will have much reform in the medical industry until a majority of doctors awaken and see what their profession has become. Reform can only happen if the doctors agree on the changes. I hope this happens before it is too late to save anything!

Anonymous said...


Good point. I find it personally frustrating that doctors are unable or unwilling to reclaim their position as doctors and scientist.

Steve Lucas

Peter Jones said...

Hi Roy, It's fascinating to compare and contrast health politics, issues and delivery in health care systems across the atlantic. Makes you dizzy tho. I read Walter Bortz' book Next Medicine - have you come across this?
You may find the open access conceptual framework Hodges model of interest – Many thanks, Peter @h2cm
Blog at “Welcome to the QUAD”
Hodges Health Career – Care Domains – Model
h2cm: help 2C more – help 2 listen – help 2 care!/h2cm

Wil B. said...

Dr. Poses, thank you for your blog and all the efforts you have been making to advocate for changes in the medical care system. I think your efforts, along with your friend Dr. Brody, are starting to finally gain some traction.

I would like to submit my own comment to this recent piece.

As you have observed numerous times, part of the problem with the medical system is perverse incentives and rampant conflicts of interest among the various players. My own conclusion is that this problem is not likely to be fully addressed until the profit motive is largely removed from the system. For one example (and this is by no means my original idea), the research and development of pharma and device companies should not be relied on for FDA determination of safety and effectiveness. Rather, these functions should be performed by truly independent organizations that are non-profit or government sponsored with appropriate regulatory oversight by other than the FDA. And the companies should be assessed for the reasonable cost of this crucial function.

I know....I know; this is probably not politically feasible yet. But until something along these lines can be accomplished, the term "health care" will continue to be a misnomer because, under the existing, outrageously expensive, profit-driven system, the actual health of the individual will remain largely irrelevent.