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Drug & Device News
Parent J&J Is Off the Hook; Not So Its Subsidiary
U.S. District Judge Michael Shipp has granted Johnson & Johnson's (J&J's) motion for summary judgment in a suit alleging that its subsidiary, Janssen Products, promoted off-label use of its HIV/AIDS drugs Prezista and Intelence. Citing to precedent set by the U.S. Court of Appeals for the Third Circuit in In re Burlington Coat Factory Securities Litigation, Judge Shipp concluded that “mere ownership” of a subsidiary did not subject the parent company to liability. However, the qui-tam claims brought by relators within Janssen's sales force got the green light to go forward.
The claims allege that Janssen violated the federal False Claims Act (FCA), the federal Anti-Kickback Statute, and a number of state anti-fraud laws by inducing physicians to prescribe the drugs for off-label uses in order to reap payments from Medicaid and Medicare. The scheme, the plaintiffs say, involved the company conducting dinners for physicians at which speeches were made, while promoters were planted throughout the audience to ask specific questions with the aim of convincing attendees to prescribe the drugs to their patients. In addition, the claims allege that the manufacturer said Prezista does not negatively affect cholesterol or triglyceride levels, when in fact it does, and can therefore increase a consumer's cardiovascular disease risk.
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