Summary

Monday, November 04, 2013 Attorney General Eric Holder announces action against Johnson & Johnson SLUG: 1115 HOLDER HEALTHCARE RS6 76 AR: 16X9 DISC# 541 NYRS: 5120 11:17:35 ATTORNEY GENERAL ERIC HOLDER: Good morning, and thank you all for being here I am joined by the associate attorney general, Tony West, the assistant attorney general for the Civil Division, Stuart Delery, United States Attorney for the Eastern District of Pennsylvania Zane Memeger, the US attorney for the District of Massachusetts, Carmen Ortiz, First Assistant United States Attorney for the Northern District of California Brian Stretch and the deputy inspector general for investigations at the Department of Health and Human Services, Gary Cantrell 11:18:05 We are here today to announce that Johnson & Johnson and three of its subsidiaries have agreed to pay more than $22 billion to resolve criminal as well as civil claims that they marketed prescription drugs for uses that were never approved as safe and effective and that they paid kickbacks to both physicians and pharmacies for prescribing and promoting these drugs Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients and the private insurance industry They drove up costs for everyone in the health care system and negatively impacted the long-term solvency of essential health care programs like Medicare This global settlement resolves multiple investigations involving the antipsychotic drugs Risperdal and Invega as well as the heart drug Natrecor and other Johnson & Johnson products Now, the settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members of our society, including young children, the elderly and the disabled In the criminal information filed today, we allege that Johnson & Johnson subsidiary Janssen Pharmaceuticals Incorporated violated the Federal Food, Drug, and Cosmetic Act by introducing Risperdal into the market for unapproved uses Now, in its plea agreement, Janssen admits that it promoted this drug to health care providers for the treatment of psychotic symptoms and associated behaviors exhibited by elderly nonschizophrenic patients who suffered from dementia, even though the drug was approved only -- only -- to treat schizophrenia 11:19:46 In separately filed civil complaints, we further allege that both Johnson & Johnson and Janssen Pharmaceuticals promoted Risperdal and Invega to doctors and to nursing homes as a way to control behavioral disturbances in elderly dementia patients, in children, as well as the mentally disabled Now, the companies allegedly downplayed the serious health risks that were associated with Risperdal, including the risk of stroke in elderly patients, and even paid doctors to induce them to prescribe these drugs As part of the scheme, the companies allegedly paid kickbacks to the nation's largest long-term care pharmacy, whose pharmacists were supposed to be the gatekeepers to provide an independent review of patient medications 11:20:33 Instead, at the companies' behest, the pharmacists allegedly recommended Risperdal for nursing home patients who exhibited behavioral symptoms associated with Alzheimer's Disease as well as with dementia Now, this alleged conduct resulted in government health care programs paying millions of dollars -- millions of dollars -- in false claims for these drugs 11:20:56 Now, to resolve allegations stemming from the improper promotion of Risperdal, Janssen Pharmaceuticals will plead guilty to misbranding Risperdal, and has agreed to pay $400 million in criminal fines as well as forfeitures Johnson & Johnson and Janssen Pharmaceuticals have further agreed to pay over $12 billion to resolve their civil liability under the False Claims Act And Johnson & Johnson will pay an additional $149 million to resolve claims relating to alleged kickbacks to a long-term care pharmacy Now, in addition to these claims, we allege that Johnson & Johnson as well as its subsidiary, Scios Incorporated, promoted the heart failure drug Natrecor for off-label uses that caused patients to submit to costly infusions of the drug, without -- without -- credible scientific evidence that it would have any health benefit for those patients In a separate matter that was resolved in 2009, Scios pleaded guilty to misbranding Natrecor and paid a criminal fine of $85 million To resolve current allegations associated with the settlement that we announce today, the companies have agreed to pay an additional $184 million 11:22:14 Now this significant settlement was made possible by the relentless investigative and enforcement efforts of dedicated men and women serving as part of the Health Care Fraud Prevention and Enforcement Action Team, or HEAT, which Health and Human Services Secretary Kathleen Sebelius and I launched more than four years ago to recover taxpayer dollars, to keep the American people safe and to aggressively pursue fraud and misconduct whenever and wherever it is found 11:22:43 Put simply, the alleged conduct is shameful, and it is unacceptable It displayed a reckless indifference to the safety of the American people, and it constituted a clear abuse of the public trust, showing a blatant disregard for systems and laws designed to protect public health 11:23:02 As our filings make clear, these are not victimless crimes Americans trust that the medications prescribed for their parents and grandparents, for their children and for themselves are selected because they are in the patient's best interest Laws enacted by Congress and the enforcement efforts of the Food and Drug Administration provide important safeguards to ensure that drugs are approved for uses that have been demonstrated as safe, as well as effective Efforts by drug companies to introduce their drugs into interstate commerce for unapproved uses subvert those laws Likewise, the payment of kickbacks undermines the independent medical judgment of health care providers It creates financial incentives to increase the use of certain drugs, potentially putting the health of some patients at risk Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, they jeopardize the public health, and they take money out of taxpayers' pockets 11:24:09 This settlement demonstrates that the departments of Justice and Health and Human Services, working alongside a variety of federal, state and local partners, will simply not tolerate such activities No company is above the law, and my colleagues and I are determined -- determined to keep moving forward, guided by the facts and the law; using every tool, resource and authority at our disposal -- to hold these corporations accountable, to safeguard the American people and to prevent this conduct from occurring in the future 11:24:42 You know, this announcement marks another step forward in our strategic, comprehensive and effective approach to fraud prevention We can all be encouraged by the actions that we have taken and by the results that we have obtained in recent years But we cannot yet be satisfied, and that's why, here in Washington and across this country, this critical work will continue 11:25:07 Now I'd like to thank everyone who made this settlement possible In particular, I want to recognize the leaders, prosecutors, trial attorneys, the investigators and the staff at the Civil Division here in Washington, as well as our United States attorneys' offices in Philadelphia, in Boston and in San Francisco I'm grateful for the committed efforts of our partners at the Department of Health and Human Services, particularly in the Office of the Inspector General, as well as the Food and Drug Administration and many other federal agencies that contributed to this outcome And I want to thank each of the state attorneys general and Medicaid Fraud Control units across this country who contributed to this investigation We'd be happy to take a few questions at this time And I guess what I'd like to ask is maybe direct the -- at least the initial questions at the announcement that we have just made Q: Over what period of time were these drugs improperly administered? And how many patients received them, took them? 11:26:08 MR : With regard to the number of patients, I don't have that figure With regard to the False Claims Act allegations with regard to Risperdal, it covers a 10-year period from 1999 to 2009 With regard to the criminal misdemeanor charge, it covers a little over a one-year period, which starts in March of about 2002 and carries on until December of 2003 It covers a time period where the Risperdal label was limited to schizophrenia Q: Were there any cases where the risk actually turned into actual harm, so it wasn't just that these patients were put at risk, but that they actually had some sort of harmful effect? 11:26:52 MR : With regard to the evidence in this case, we don't have evidence of actual patient harm What we do have are statements and representations that indicate that risk was being minimized with regard to the use of the product in the elderly, especially with regard to the risk of stroke, also with regard to diabetes, things of that nature And it's incumbent on the government to take a look at these type of behaviors to make sure that we're prosecuting these cases appropriately to ensure patient safety STUART DELERY (assistant attorney general for the Justice Department's Civil Division): Just to add to that, one thing that ties the pieces of this case together, the fact that all of that relates to conduct that undermines the regulatory system that's been set up to protect the safety of the medicines that we take And so part of it relates to activities of the company in marketing efforts, but also the Omnicare portion of the case relates to kickbacks that were paid which have the potential to undermine the medical judgment of medical professionals making decisions about individual patients And we think it's important that we enforce this program that the federal Food and Drug Administration administers to safeguard medical judgments that are made across the country Q: Are there any remaining claims that the government has against Johnson & Johnson related to these -- related to these drugs? Or does this settle all the claims that the government has against the company? 11:28:25 MR : This is a global resolution with regard to the drugs that are announced This resolves the matter based upon the evidence that we evaluated and made significant determination as to what the appropriate result would be And we've now reached a global resolution so that we can move on to other cases Q: How many physicians were involved in taking kickbacks and how much was taken? 11:28:57 CARMEN ORTIZ: We do not have that specific number And a lot of the -- what had occurred was that J & J, as well as Janssen paid the kickbacks to Omnicare And Omnicare, actually in 2009, settled charges against it in which it had accepted kickbacks from J & J and it had also paid kickbacks to lodging -- to nursing homes that were utilizing Omnicare, the pharmacy, for its prescription drugs And the kickbacks were really in the form of rebates that went to Omnicare as well as fees that were supposedly to pay for data and to -- also payments were disguised to look like educational funding, in particular for pharmacists who were used to induce doctors to prescribe certain medications, and in particular respitrol (sp) to seniors in nursing homes Q: (Off mic) -- payments were made to doctors, they were made with sort of a blanket payment -- (off mic)? 11:30:03 MS ORTIZ: I believe that payments went to the doctors in this -- in the basis of, like, speaking fees for certain presentation that were made and certain meetings that were attended Q: Just to reiterate the question that was already asked, if we're looking for a case where someone has either died or an elderly patient has been injured because this, you don't know of one; is that accurate? MS ORTIZ: I believe that's correct Yes, that is Sir? Q: There was a decision from the 2nd Circuit last December, in a case called US versus Karonia (sp), that held that the First Amendment basically protected off-label marketing by drug companies Can you explain to us, if you think that decision was wrong, why didn't the department try to pursue that elsewhere? And are you pursuing these cases, you know, like that, or do you still think those laws should be enforced anyway? MS ORTIZ: Well, I believe that in that particular case, the conduct that was looked at, the court determined that, you know, it could violative of First Amendment speech That's not what we are behind here And certainly under the facts of this case, we're not looking at off-label marketing in terms of alleging certain factors that are accurate In particular, one of the key drugs that were highlighted in this case, Risperdal, it had been approved for uses for schizophrenia by the FDA, and only that use, and yet the company promoted it and sold it and induced others to buy it through kickback schemes and other inducements to treat the elderly who were suffering from Alzheimer's or other forms of dementia, to treat children and also to treat the disabled And when you promote drugs for purposes that they are not intended and have not been approved by the FDA, we don't believe that's a violation of the First Amendment Q: (Off mic) -- off-labeling marketing That's exactly what it is, isn't it? 11:31:52 MS This is promoting drugs -- what we're prosecuting is promoting drugs for purposes that have not been approved, that have not been shown to be safe or even effective And that's what this case is about Q: Thank you MR : The statute requires that for intended uses the labeling for the drug provide directions for use and reflect any restrictions that the FDA requires And what we're talking about in this case involved promotion for intended uses without the required instructions for use that the statute mandates And so that's the nature of the claim here Q: Mr Attorney General, there are obviously lots of questions about the shooting at LAX on Friday Just wondering what the latest -- your understanding is of the investigation, and do you think there were any things that could have been done to stop this? And how do we stop this in the future? 11:32:51 ATTY GEN HOLDER: Well, the investigation's obviously underway, and a part of that investigation will be a review of the security measures that were in place not only at LAX but, I think, a review of the security arrangements that exist in other airports as well Function of the TSA is to ensure that people can board planes safely, take flights safely The responsibility for protecting airport security is not a TSA function, but something that I think we need to certainly examine, given what happened in Los Angeles Q: Do you think it's fair to say that a sort of anger at the government was behind this attack? 11:33:28 ATTY GEN HOLDER: I mean, these -- this is one of the things that we'll have to try to determine as part of the investigation There have been some preliminary things that we are learning and that have been reported, but in -- we have to have a -- get a fuller understanding of the person who we now have in custody to understand what his motives -- what his motives might have been Whatever those motives, it certainly doesn't justify what occurred -- the brave TSA agent who was killed, others who were injured No feelings about the government can possibly justify those kinds of actions Q: Your department's scheduled to go trial in three weeks over the merger of American Airlines and US Airways Can you give us a sense of how likely it is that you will settle those -- that case before trial, and what's the status of negotiations? 11:34:17 ATTY GEN HOLDER: Well, this is a matter that we have been in touch with the industry -- the airlines that we have sued We've expressed concerns about the potential reduction in competition that the merger would potentially impose I'm not going to go into any detail with regard to the discussions that we are engaging in, but I will say that they are -- they are ongoing But what we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key, constrained airports throughout the United States That, for us, is something that has to be a part of any resolution So as I said, the conversations are ongoing, and we hope that we will be able to resolve this short of trial But if we do not meet those demands that we have, we are fully prepared to take this case to trial Q: The complaint that was brought listed more than a thousand different city pair (routes ?) -- you're saying that you'd be willing to accept a settlement that had, I guess, a substantially lower number of city pairs that were part of the settlement where that -- (inaudible) -- 11:35:32 ATTY GEN HOLDER: Well, our concern is making sure that we look at, as we do have in all cases that the Antitrust Division brings, to make sure that we bring benefit to consumers We certainly alleged in the complaint the concerns that we have had, and there are a number of ways, I think, that we can deal with those concerns We'll see what the conversations that we have with the other parties bring, but we will not agree to something that does not fundamentally resolve the concerns that were expressed in the complaint and do not substantially bring relief to consumers Q: The last question is, is there, like, a magic number of slots that you need from different airports like JFK or LaGuardia or DC? ATTY GEN HOLDER: Yes, there is, but I won't tell you what it is (Laughter) Q: Attorney General, a quick question on surveillance issues You know there's been a flap over the week or two -- a very significant furor overseas about US surveillance practices As I understand it, about 80 percent of the work agencies like the NSA does is actually outside the US and is basically ungoverned by statute It's governed largely by guidelines that either you or your predecessors put in place Are you looking at whether those guidelines provide any protection for foreign nationals or whether there are sufficient protections -- if any assurances can be given to people abroad that the government -- this government isn't just willy-nilly rummaging through their communications? 11:36:53 ATTY GEN HOLDER: Well, as the president has indicated -- and I think he's totally right -- we are in the process of conducting a review of these surveillance activities to make sure that we're striking an appropriate balance between keeping the American people safe and our allies safe, and also guarding the civil liberties and the privacy of those -- those same people So we're in conversations with our partners in Europe and other parts of the world to make sure that we strike that appropriate balance There are some fundamental questions I think we have to ask ourselves Simply because we can do certain things doesn't necessarily mean that we should do these things That are -- those -- that's, I think in some ways, the chief question that has to -- has to be resolved, almost a cost-benefit: What is the benefit that we are receiving, what are the protections that we are generating, against the privacy that we necessarily have to -- have to give up That review is underway It's a thorough review The president is fully engaged in that review, as are other members of the National Security team, the intelligence community And I would expect that in a relatively short period of time, we will have announcements to make in that regard Q: (Off mic) 11:38:09 ATTY GEN HOLDER: I'll just emphasize one thing The concerns that we have here are not only with American citizens I hope that people in Europe will hear this -- people who are members of the EU, the nations that are members of the EU Our concerns go to their privacy considerations as well So we're looking at this in a -- in a very holistic way Q: Can you help the average taxpayer understand why a healthcare fraud investigation as long as -- and also a banking investigation might take so many years? As Dave (sp) mentioned, the complaint in this case was back in 2002, it's been 10 years And can you help the average person understand why it takes so long to get to here? 11:38:50 ATTY GEN HOLDER: Well, I'll let them maybe speak specifically about this one, but my own experience is that these are complex investigations that require huge amounts of research, lots of documents that have to be reviewed and great numbers of people who have to be interviewed They frequently cross jurisdictions -- (inaudible) -- state lines, even federal jurisdictions And one of the things that you want to make sure is that you investigate these things as thoroughly as you can to make sure that you understand in its totality the harms or the potential harms that have occurred and hold accountable the corporations, the institutions and all of the individuals that you possibly can I don't know if you'll want to -- Q: But is there -- is there -- (inaudible) -- unless someone goes to jail, particularly a leader or CEO, that this will be just be viewed as the cost of doing business, as Mr Dillery (sp) and others have testified? 11:39:42 ATTY GEN HOLDER: No, I think that given the magnitude of the -- of the settlements that we extract and also the ongoing nature of the monitoring that is done that is a part typically of these -- of these resolutions, that conduct and cultures tend to change in these -- in these companies And we -- as I said, we work through these to make sure that that which happened in the past does not happen in the future I don't know if you'll want to add anything MR WEST: Maybe I mean, I think the only thing I'd is I think what you've seen in the last four and a half years increasingly from this Department of Justice and from this attorney general, is in settlements like this, in resolutions like this, nonmonetary provisions which seek to change corporate behavior So, you know, you have some very specific provisions here that talk about changing the compensation models for the sales force, about changing some of those incentives and to actually try to change behavior Obviously, the magnitude of the fine and the penalty sort of speaks for itself But in addition to accountability, I think we are looking for (deterrents/deterrence ?) -- factual statements, oftentimes Here you have a guilty plea, of course, but in those fully civil-only kinds of settlements, you'll have an acknowledgement of facts, oftentimes And so I think as we think about how best to resolve these types of case, we are looking for ways that will change behavior as well as demand accountability MS : One more question Q: Would you -- would you give us an update on the discussions with JP Morgan Chase? You know, we were expecting a settlement perhaps to be announced very quickly, but it appears there are some sticking points Can you tell us what those are and what the process of resolving those is? ATTY GEN HOLDER: What time frame were you expecting? Q: Soon 11:41:41 ATTY GEN HOLDER: Soon? Soon Well, that's still an operative phrase The associate attorney general, Tony West, has been leading our side in connection with these conversations They are ongoing I think they have been productive I don't want to get into the nature of what we have been talking about, other than to say that I expect one way or the other we will resolve this soon We'll either have an agreement or we will be filing a lawsuit Q (?): Perhaps Tony can elaborate ATTY GEN HOLDER: Tony, you want to elaborate? MR WEST: We're not in a position to announce anything today MS : Thank you Thank you very much ATTY GEN HOLDER: Well, hold on Hold on Hold on Are there other questions? Q: Yes, Mr Attorney General I can't help but note that it was almost four years ago to the day that you were at this podium and announced your decision in the KSM case Four years now Obviously, a military prosecution has taken place Do you still stand by your decision then? And do you think that the prosecution would have been over by now if this was in a civilian court? 11:42:40 ATTY GEN HOLDER: I think that's actually a good question to ask And I think that what we have seen over these past four years -- not to be egocentric about this, but that I was right I had access to documents, files, recommendations by the military, US Attorney's Offices in the Eastern District of Virginia as well as the Southern District of New York And I think the decision that I announced on that date was the right one And I think that the facts and events that have occurred since then demonstrate that I think that had we gone along the path that I announced at that time, we would not have had to close down half of Manhattan, it wouldn't have costed $200 million a year, and the defendants would be on death row as we speak We, unfortunately, did not go down that road, I think for reasons other than those connected to the litigation, I think largely political; the opposition was largely political in nature And I think this is an example of what happens when politics gets into matters that ought to be simply decided by lawyers and by national security experts Q: Which brings me to al-Libi, who is being tried in the federal court How long do you expect that trial to last? And what are your expectations for the case, and can you -- anything you can share about it? 11:44:13 ATTY GEN HOLDER: That's a pending matter, so I want to be careful about any comments that I might make Obviously, charges have been filed, very serious charges The defendant has been charged with participation in a worldwide conspiracy that has a number of separate acts, including the bombings of our embassies It is our intention to hold him totally accountable, as we have others who were parts of that -- were part of that conspiracy And I think that the process that we used there, where we were able to get intelligence from him and still have a viable Article 3 case, is an indication that the Article 3 system is a very effective tool at holding people accountable and at the same time getting intelligence from people who possess it Q: How long do you expect that -- this process to last? (Inaudible) -- four years if not even longer Do you expect this to be just as long, or half the time, or -- ATTY GEN HOLDER: (Off mic) -- just as long as Q: (Inaudible) 11:45:18 ATTY GEN HOLDER: No, I think my -- I mean, if you look at the history of Article 3 prosecutions, you will see that they don't take nearly as long as those that occur in the military system, which is not to say that some cases should not be brought in the military system As I indicated on the day that I announced the KSM determination, we (referred some ?) to the military commission process But I think if you look at the hundreds of cases that we have brought in the Article 3 courts, we've shown that we can be effective, we can do them relatively quickly and that we can get the results that are consistent with the facts We hold people accountable We hold people accountable Q: Since you're taking questions on a wide range of topics, on the Boston Marathon case, is the Justice Department going to go for the death penalty in that case? 11:46:08 ATTY GEN HOLDER: We have an ongoing -- we have a process that we have to follow in that We have the United States attorney from Boston who is a part of that process A recommendation will come from the US attorney, will go through our capital case review committee, will go through the deputy attorney general and finally will come to me before I make a determination as to whether or not we would seek the death penalty And that process is ongoing Q: Have you made a recommendation, Ms Ortiz? 11:46:34 ATTY GEN HOLDER: The process, as I said, is ongoing Q: Mr Attorney General, why haven't civil charges been filed against George Zimmerman yet, and what is the timeframe for an announcement or a decision? 11:46:48 ATTY GEN HOLDER: Well, the case of George Zimmerman and what happens there, I mean, I think in substantial part was resolved in the case that was tried The investigation or the inquiry, the review that we are doing is still under way I'm not sure exactly how much longer that will take, but we will -- when we get to a point where we are able to make a determination -- we've tried to construct the case in such a way that we'll be able to share as much information, not just make an announcement but to share as much information as we can with regard to that determination Q: OK One more? ATTY GEN HOLDER: Oh, OK, one more (Laughter) Q: There's a -- there's a Senate hearing this week on prison reform What would you like to see the Senate -- what would you like to see Congress pass to change the way the US prison system operates? 11:47:42 ATTY GEN HOLDER: Well, I talked about this, I guess, at an ABA speech in San Francisco in August, and I said that the system, I thought, was broken I didn't mean to imply that I was only talking about the federal system I think the problems that we have go much further than that And I think we need to come up with ways in which we hold people accountable, but we also need to come up with ways in which we prevent people from becoming involved in the criminal justice system, deal with people who have deficits and who are in the system, so that they can be made better and then ultimately released and to become productive citizens And that's why I think we need to focus on re-entry efforts as well We also need to have sentences that are, I think, consistent with the conduct that a particular defendant is convicted of I think there's been a tendency in the past to mete out sentences that frankly are excessive And at this point, given the resource constraints that we have, and as I look just at the Justice Department and the amount of money that the Bureau of Prisons consumes, we have to really rethink our priorities We never want to put at risk the safety of the American people, and some states have shown that you can come up with, I think, pretty substantial reform, keep the American people safe and do things in a way that's different And I would hope that Congress would look at the experience of the states, look at the proposals that we have made and make those 21st century changes that I think are really needed STAFF: Thank you very much ATTY GEN HOLDER: Thank you