& Johnson Pushed Drugs on Seniors, Suit Alleges By Jon Hood
A lawsuit filed last week accuses Johnson & Johnson of conspiring with
pharmaceutical consultant Omnicare in an effort to push J&J drugs on
nursing home residents, and violating federal Medicaid laws in the process.
a result of the scheme, "residents were overcharged for their medications,
had additional medications administered and were unlawfully switched to
Johnson & Johnson drugs," all in the name of increasing revenue,
according to the lawsuit.
suit, filed in federal court in California, says Omnicare -- which "occupies
a 'dual' role of a dispensing pharmacy and consulting pharmacy" --
gave certain J&J drugs "elevated status as the default drug of
choice" for thousands of nursing home patients. J&J allegedly gave
Omnicare "performance rebates" -- essentially kickbacks -- in
return for its services. This arrangement was memorialized in a 1997 "Supply
Agreement" between the two companies, the suit states.
agreement provided that the two companies would "meet quarterly to
review their joint 'business plan' and 'performance goals,'" and came
up with a novel way to deal with the performance-rebates: they would be
treated as year-end bonuses.
drugs allegedly targeted for promotion under the agreement included Floxin,
Levaquin, Risperdal, Ultram, Duragesic, Procrit, and Aciphex.
suit contends that under the agreement, J&J paid to have its drugs labeled
as "preferred" -- a status that Omnicare purportedly confers on
drugs that receive high marks "for their clinical effectiveness in
the geriatric community."
an effort to distribute as many J&J drugs as possible, Omnicare allegedly
encouraged nursing home physicians to use a so-called "Active Intervention
Program" to push J&J drugs on seniors. The program "was designed
to 'shift market share' to Johnson & Johnson from other pharmaceutical
patients on antipsychotic drugs, Omnicare's pharmacists were even given
hypothetical "scripted communications [to have] with the prescribing
physicians under various scenarios," intended to convince the physicians
that switching to Risperdal -- a J&J-manufactured antipsychotic -- was
in the patient's best interest.
to the suit, the companies also came up with a way to get around Medicaid's
"best price law," a federal statute intended to ensure that Medicaid
pays as little as possible for prescription drugs. Under the law, once the
discounts and rebates exceeded a certain level, the companies would have
been required to pass them along to Medicaid.
that threshold was breached, "the Supply Agreement required a retroactive
price adjustment" to avoid losing the kickback. The suit also alleges
that J&J and Omnicare developed several other complex schemes designed
to avoid breaching the best price threshold.
suit defines two potential classes, one national and one consisting only
of California residents. In either event, the class would consist of nursing
home residents who received drugs or services from Omnicare, and who paid
for and received one or more of an enumerated list of drugs.
class period stretches from April 1, 1997 to the present. If an eligible
class member has passed away, his or her estate would be eligible for inclusion
in the class.
Read more: http://www.consumeraffairs.com/news04/2010/04/jnj_omnicare_suit.html#ixzz0kvx8WeyE