Thursday, September 06, 2012

How Many Legal Settlements Does it Take... to Lead to Real Change in Johnson and Johnson Leadership?

And the latest Johnson & Johnson settlement is (as described in Bloomberg/ BusinessWeek):
Johnson & Johnson (JNJ) will pay $181 million to resolve claims by 36 states that it improperly marketed and advertised the antipsychotic drugs Risperdal and Invega.

J&J and its Janssen unit settled claims that it promoted the drugs from 1998 through 2004 for uses not approved by the U.S. Food and Drug Administration. New York Attorney General Eric Schneiderman said today the accord is the largest multistate consumer protection-based pharmaceutical settlement.

'This landmark settlement holds the companies accountable for practices that put patients in danger, and serves as a warning to other pharmaceutical giants that they must play by one set of rules,' Schneiderman said in a statement.

J&J agreed it won’t promote the drugs for off-label uses or tout them falsely.

Specific Bad Behaviors

The allegations were of the sorts of behavior that should make health professionals cringe,
Using speaker programs on unapproved uses, sham consulting programs for physicians, and lucrative agreements with doctors who prescribed off-label, J&J 'sought to enhance Risperdal’s off-label market penetration across a wide range of diagnoses and patient populations, according to Florida’s complaint.

So reading slightly between the lines, the behaviors included various ways to pay physicians ("sham consulting," "lucrative agreements") for prescribing drugs, providing physicians monetary incentives to violate the most core of their core values, putting the individual patient's welfare and needs ahead of personal enrichment. Why these were not labeled kickbacks or bribes is not obvious.

No Individuals Pay any Penalty

Nonetheless, as in nearly every other legal action by state or federal law enforcement against a big pharmaceutical company or other big health care company, the entire settlement involved no penalties to any individuals who may have authorized, directed or participated directly in the misbehavior. In fact,
The company, based in New Brunswick, New Jersey, settled 'to resolve the concerns of the attorneys general under state consumer protection laws and to avoid unnecessary expense and a prolonged legal process,' it said in a statement.

J&J didn’t admit wrongdoing or pay a fine or penalty.

The tough law enforcers claimed
The agreement 'sends a message to all pharmaceutical companies that these practices will not be tolerated,' Florida Attorney General Pam Bondi said in a statement.

Of course, there was another part to the settlement. The company promised not to do these sort of bad things again,
Bondi said Janssen agreed to several steps over five years. They include having policies to ensure that financial incentives aren’t given to encourage off-label marketing; sales and marketing employees can’t develop the medical contents of responses to health-care providers; and it must describe the effectiveness and risks of drugs in a balanced manner.

Should we believe them? Their record is not promising.

Earlier this year Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians about the very same drug at issue in this suit, Risperdal (look here). That was 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.)

One might think that the leadership on whose watch this all occurred would be in disgrace. There has been, however, no major changes in leadership of the company. The CEO who was in power during the time when these settlements, and much of the behavior leading to them, will be retiring, after earning huge compensation, and with a retirement package valued somewhere between $143 and $197 million (see this post). Rather than disgrace, he recently was put on the committee responsible for investigating JP Morgan Chase's $5.8 billion dollar trading loss (as reported by Bloomberg, via


As we have noted again and again and again, many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved.

These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look here). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "grow a backbone" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.

As we have said before, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.


Daniel Haszard said...

Risperdal reproached.
Same saga here as Eli Lilly Zyprexa.

Johnson and Johnson is a trusted brand we associate with babies.
Risperdal, Zyprexa, as well as the other atypical antipsychotics, are being prescribed for children, even though this is an unapproved, off-label use.

An estimated 2.5 million children are now taking atypical antipsychotics. Over half are being given them for Attention Deficit Hyperactivity Disorder, many of these foster children.
Weight gain, increases in triglyceride levels and associated risks for (life-long) diabetes and cardiovascular disease.
Eli Lilly made $67 BILLION on Zyprexa!
*Tell the truth don't be afraid*.
Daniel Haszard

Afraid said...

"Why these were not labeled kickbacks or bribes is not obvious." -- I see one, if they were kickbacks or bribes, then both the company and the doctors would be culpable.

A bribe is wrong on both the part of the briber and the bribee.

MDs have a role to play in cleaning up this mess. Don't take the bribe, or are we saying that the MD simply can't resist?

Unknown said...

The only thing protecting these patients from the incompetent medical industries are lawyers even if we know that it will take a lot more than DePuy Pinnacle lawsuits to stop them. The big sums of money paid out in lawsuits by the medical industries are very tiny compared to their profit. If every lawyer in the United States became a service liability and medical product lawyers there still would not be enough lawyers to serve the thousands of victims each year. These medical industries in the US is over 20% of the UD GDP making it the 4th or 5th largest economy in the world.