Johnson & Johnson (J&J) is the subject of a California lawsuit alleging that the “family company” colluded with pharmaceutical consultant Omnicare to push its drugs on nursing home residents. Among the charges are allegations that J&J violated federal Medicaid laws with its schemes to maximize profits.
According to the suit, J&J was paying kickbacks to Omnicare to promote its drugs above those of other manufacturers, and convincing doctors that switching to J&J drugs was in their patients’ best interests. The arrangement also included whitewashing these kickbacks as “performance rebates” that would be issued as “year-end bonuses.”
“Residents were overcharged for their medications, had additional medications administered and were unlawfully switched to Johnson & Johnson drugs,” explains the lawsuit. These medications included Floxin, Levaquin, Risperdal, Ultram, Duragesic, Procrit and Aciphex.
During their joint meetings to discuss “performance goals,” J&J allegedly trained Omnicare employees to use “scripted communications” to convince physicians to switch their patients to J&J drugs as opposed to whatever they were currently on. This was included as part of the J&J’s “Active Intervention Program,” which basically is just a fancy name pushing its drugs on seniors.
J&J even went out of its way to bypass federal laws that protect the interests of the Medicaid program. Medicaid provisions include a “best price law” that is designed to keep costs low for Medicaid reimbursement and when drug discounts and rebates exceed a certain threshold, the drug company would have to then pass those on to Medicaid. But J&J is said to have worked with Omnicare to develop a scheme to avoid this threshold.
If the threshold was breached, Omnicare would have to initiate a retroactive price adjustment in order not to lose its kickback. So the company participated with J&J to make sure that didn’t happen.
If the allegations are true, J&J has demonstrated itself to be unscrupulous in its business practice, willing to do whatever it takes to rake in the highest profit. Not only this, it will also have violated federal law.
The class-action suit includes two groups of patients: those nationwide and those specifically in the state of California. Any nursing home patients who received drugs or services under Omnicare between April 1, 1997, and the present are eligible to participate in the suit.
Even eligible patients who have since passed away can have their estate included in the suit.