(MintPress) – After Johnson & Johnson downplayed and concealed the risks associated with the antipsychotic drug Risperdal often distributed in nursing homes, the company plans to make an announcement saying it will pay $2.2 billion after a major U.S. probe was pushed into the marketing strategies of the drug, according to a report released by Bloomberg.
Two people familiar with the negotiations, who wished to remain anonymous, said the announcement may come as early as this week. The settlement will include a misdemeanor plea and criminal penalty of up to $600 million.
The agreement also covers claims of illegally marketing the heart-failure drug Natrecor and the antipsychotic medication Invega, according to the sources. According to lawsuits filed throughout the U.S., Johnson & Johnson has come under fire for allegedly “making false or misleading statements about the safety, cost and effectiveness of the Risperdal, and improperly influencing officials and doctors to push the drug.”
According to the sources, the settlement will also resolve claims against Johnson & Johnson over alleged kickbacks to Omnicare Inc., a company that distributes pharmaceuticals in nursing homes, hospitals and other long-term care providers.
This will be the second largest settlement with a pharmaceutical company that the U.S. government has been involved with. The largest agreement came in 2009 in a $2.3 billion settlement with Pfizer Inc. for improper marketing of its drugs.
“This is a gigantic settlement that reflects the seriousness of the criminal and civil allegations against J&J over Risperdal and the other drugs,” Carl Tobias, who teaches product-liability law at the University of Richmond law school, said.
The company has not stated that it will change any of its current policies and will, instead, increase its reserve funds by $600 million in preparation of potential future lawsuits.
While the settlement will cover the claims made by many states, some states, including Arkansas, Louisiana and South Carolina, where the company has already appealed or plans to appeal judgments over drug sales, will not be included in the suit.
In April, an Arkansas judge fined Johnson & Johnson and a subsidiary more than $1.1 billion in relation to concealing the risks associated with Risperdal.
Circuit Judge Tim Fox announced that the company would need to pay $5,000 for each of the 240,000 prescriptions for Risperdal the state coverage program paid for during a 3½ -year period.
Additionally, Johnson and Johnson agreed to pay $158 million in January in a Texas lawsuit over the marketing of Risperdal to residents on the Medicaid health program, including children and adolescents.