Johnson & Johnson Enters Into the Third-Largest Pharmaceutical Settlement EVER

Johnson & Johnson is paying the third-largest pharmaceutical settlement ever to settle civil and criminal fines that it improperly marketed and promoted the antipsychotic drug Risperdal.  Much of the conduct occurred when current Johnson & Johnson CEO Alex Gorsky was vice president for sales and marketing or president of the pharmaceutical unit.

The United States Attorney General said that the company "recklessly put at risk the most vulnerable members of our society."  In response, Johnson & Johnson's vice president and general counsel said "This resolution allows us to move forward and continue to focus on delivering innovative solutions that improve and enhance the well-being of patients.

However, it is hard to understand the extent to which the company could move on given that Mr. Gorsky is now the CEO.  "Stockholders and patients will pay the price for the fraud," said Partick Burns, co-director of Taxpayers Against Fraud, and advocacy group for corporate whistle-blowers.  Gorsky not only keeps his job, and his lavish benefits and bonuses, but ends up as CEO.

Federal officials said the company knew that Risperdal posed serious risks for older adults, like an increased risk of strokes, but played them down.  Johnson and Johnson also knew that children were susceptible to certain health risk from taking the drug, including the possibility that boys could develop breasts through elevated production of the hormone prolactin, federal officials said.  Despite this, J&J told its sales representatives to visit child psychologists and mental health facilities that mainly focused on children and to promote the drug for defecit hyperactivity disorder and obsessive-compulsive disorder.