PhillyPharma

Tougher Justice for pharma

Until they need it, high-level corporate executives complain about the federal government and its involvement in their lives, but the Justice Department is cracking down on health-care fraud and foreign corruption.

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Tougher Justice for pharma

POSTED: Tuesday, March 13, 2012, 5:24 AM

David Sell

Until they need it, high-level corporate executives from plenty of sectors complain about the federal government and its involvement in their lives.

But the Justice Department is showing signs of increasing it crackdown in at least two areas, health care fraud and foreign corruption.

Justice has demanded that Johnson & Johnson, through its Janssen pharmaceutical unit, pay more than the $1 billion to settle civil charges on the illegal marketing of the antipsychotic drug Risperdal that was negotiated with the U.S. Attorney's Office in Philadelphia, the Wall Street Journal reported. Bloomberg said the new figure demanded by Justice was $1.8 billion and that J&J had mulled raising its offer to $1.4 billion. The Journal story is here and the Bloomberg story is here.

J&J had previously disclosed in filings with the Securities and Exchange Commission that it had set aside money to settle these civil charges in the Risperdal litigation, though it had not specified the amount.

The Justice Department reportedly pushed to increase the amount after seeing the results in a Texas Medicaid case that stemmed from a whistleblower suit filed by Allen Jones. Jones was fired by the state of Pennsylvania after he uncovered fraud in the state's Medicaid system and his investigation led him to problems in Texas.

Meanwhile, the New York Times reported Sunday that Justice was increasing its efforts to stop company executives from bribing their way to business overseas.

At least 78 corporations are under investigation for possible violations of the Foreign Corrupt Practices Act, a 35-year-old law that bans American companies from paying bribes to government officials abroad, according to the Times. The story is here. Among those companies are such well-known names as Alcoa, Avon, Goldman Sachs, Hewlett-Packard, Pfizer and Wal-Mart Stores, although none of these companies have been charged.

In the story, Lanny A. Breuer, the assistant United States attorney general, said enforcement actions have increased and the department has to be willing to prosecute tougher cases, including those it might lose.

A common perception, including in health-care fraud fights, was that Justice would aim for cases in which it could get easier plea bargain convictions to misdemeanors rather than risk losing a felony case in front of a jury.

“This is not the time for the United States to be condoning corruption,” Breuer said, according to the Times. “We are a world leader and we want to do everything to make sure that business is less corrupt, not more.”

The U.S. Chamber of Commerce and several business groups are urging the Justice Department and the SEC to more narrowly define foreign bribes and officials. The Chamber's compilation of papers on this topic is here. The Pharmaceutical Research and Manufacturers Association, which is the lobbying arm of brand-name pharmaceutical companies, is included in the effort.

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Comments (3)

0 like this / 0 don't • Posted 8:22 AM, 03/13/2012

In other words, the headline should read "Justice Dept finally doing it's F-ing job".

— enabler1

0 like this / 0 don't • Posted 5:22 PM, 03/15/2012

They will still pay a big fine and keep chugging along doing what they been doing for years.

— flyers2thecup

0 like this / 0 don't • Posted 9:07 AM, 03/17/2012

Because they refuse criminal prosecutions against the guilty executives of Pharma companies, these fines are simply a business write-off. The first time a fine hit 1 billion it was estimated that the company made 10 billion pushing the drug for unapproved uses. People die because of this, and the fines are simply regarded as a cost of doing criminal business.

— glennm7