Drug firms cough up over $1 billion in fines

Posted by Press Release on December 23, 2014

The Eastern District of Pennsylvania collected more than $2 billion in criminal and civil actions during fiscal 2014, said a press release from U.S. Attorney Zane David Memeger.

The $2,373,688,153 represents part of the $24.7 billion collected in criminal and civil actions by the Department of Justice. That total is nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period, the release said.

“Recouping federal funds that were misspent due to fraud, including substantial health care and mortgage insurance funds, is a critical part of our mission,” said Memeger. “Our nation’s taxpayers deserve our most aggressive efforts to recover their hard-earned tax dollars that have been misappropriated.”

The recoveries in the Eastern District of Pennsylvania include more than $1.6 billion in civil and criminal penalties paid by healthcare giant Johnson & Johnson (J&J) to resolve misbranding and unapproved use allegations. J&J paid a $1.273 billion civil settlement to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal.

Janssen Pharmaceuticals, Inc., a J&J subsidiary, paid $400 million in a criminal fine and forfeiture for promoting Risperdal to health care providers for unapproved uses, the release said.

The collections also included a $56.5 million civil settlement with Shire Pharmaceuticals LLC to resolve False Claims Act allegations; a $150 million civil settlement with Amedisys Inc. and its affiliates to resolve False Claims Act allegations; a $7.3 million civil settlement with pharmaceutical company Astellas Pharma US, Inc., to resolve False Claims Act allegations; and a $172.9 million civil settlement with specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), to resolve allegations of off-label marketing.

Additionally, the U.S. Attorney’s office in the Eastern District of Pennsylvania, working with partner agencies and divisions, collected approximately $15 billion in asset forfeiture actions in fiscal 2014, which includes a $13 billion settlement with JP Morgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities, according to the release.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections came from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud and other misconduct and collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.

Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.