Johnson & Johnson has disclosed to investors that its Janssen Biotech Inc. is under investigation by the U.S. Department of Justice (DOJ) in connection with a False Claims Act (FCA) case related to two of its arthritis drugs. Johnson & Johnson also reported a separate investigation by the U.S. Attorney’s office in Massachusetts over copayment support programs. The company said in a 10-K filing with the U.S. Securities and Exchange Commission (SEC) that Janssen Biotech in March received a civil investigative demand from the DOJ over a False Claims Act investigation. The request concerned “management and advisory services provided to rheumatology and gastroenterology practices that purchased Remicade or Simponi Aria,” two biologic prescription drugs used to treat rheumatoid arthritis, among other conditions.
Remicade is one of J&J’s top-selling drugs, used to treat arthritis and a number of other immune-mediated inflammatory diseases, according to J&J. Sales of the drug in 2015 made up 9.4 percent of the company’s total annual revenue, bumping up to approximately 9.7 percent of the company’s total revenues the following year, according to the company’s 2016 annual report. In April, the 10-K said that J&J received a subpoena from the U.S. Attorney for the District of Massachusetts. The request sought a range of documents broadly related to pharmaceutical copayments for Simponi, a self-injectable biologic for treating arthritis, Olysio, a treatment for hepatitis C, and Stelara, a biologic used to treat psoriasis and Crohn’s disease. It was stated in the 10-K:
The subpoena also seeks documents relating to average manufacturer price and best price reporting to the Centers for Medicare and Medicaid Services related to those products, as well as rebate payments to state Medicaid agencies.
Federal prosecutors in Massachusetts have previously investigated drug companies with regard to patient assistant programs and copayment programs, including Valeant Pharmaceuticals International Inc. in October 2015. This year, medical companies like Regeneron Pharmaceuticals Inc. and Biogen Inc. have reported receiving information requests about their nonprofit patient assistance programs.
In January DaVita Inc. and Fresenius Medical Care, which provide the majority of funding to the American Kidney Fund, reported they were subpoenaed by federal prosecutors in Massachusetts over charitable donations to fund dialysis treatments. J&J’s 10-K also said it received a subpoena from the office in February of this year regarding its payments to nonprofit charities that provide financial assistance to Medicare patients. However, the drug giant said that it’s not alone in similar probes. That was confirmed by the subpoena which said: “Multiple pharmaceutical companies have publicly reported receipt of similar subpoenas and ongoing inquiries.”
Based on all of the above, it appears the investigation is far-reaching in scope. Having dealt with J&J in litigation, nothing that company does would surprise me. However, it looks like they have “corporate company” in this area of concern.
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