Global health-care giant Johnson & Johnson will pay more than $US2.2 billion ($A2.3 billion) to settle allegations that it fraudulently promoted drugs and used kickbacks to promote their sales.
In one of the largest health-care fraud settlements in US history, J&J's criminal and civil fine covers allegations the company marketed Risperdal and other prescription drugs for uses not approved as safe and effective by the Food and Drug Administration (FDA).
The settlement further covers kickbacks J&J allegedly paid to physicians and pharmacies for prescribing and promoting those drugs, the US Justice Department said on Monday.
The actions resulted in millions of dollars paid under Medicaid, the government health-insurance program for low-income and disabled people, causing losses to both the federal and state governments.
"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," Attorney-General Eric Holder said in a statement.
"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."
J&J is to pay $US485 million in criminal fines and forfeiture and a total of $US1.72 billion in civil settlements with the federal government and states.
J&J unit Janssen Pharmaceuticals admitted it had promoted Risperdal for unapproved treatment of elderly dementia patients and will pay a total of $US400 million, including a criminal fine of $US334 million and forfeiture of $US66 million. Janssen's guilty plea requires approval by the US district court.
In separately filed civil complaints, the government alleged that J&J and Janssen promoted Risperdal and Invega, a newer antipsychotic drug, to doctors - and to nursing homes - as a way to control behavioural disturbances in elderly dementia patients, children, and the mentally disabled.
The civil settlement also resolves allegations that J&J and Janssen paid kickbacks to Omnicare, the nation's largest pharmacy specialising in dispensing drugs to nursing home patients.
In 2009, Omnicare paid $US98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen.
In addition, the civil settlement announced on Monday resolved allegations that J&J and another subsidiary, Scios, caused false claims to be submitted to federal health care programs for the heart failure drug Natrecor.
Scios allegedly marketed the drug for off-label uses. Intended for patients with severe heart failure, it was given to patients with less severe heart issues over weeks and months.
As part of the global settlement, J&J must undertake a major overhaul of its pharmaceutical business over five years supervised by the Health and Human Services inspector general.
Shares in Dow member J&J were down 0.9 per cent at $US92.58 in midday trading. Omnicare shares rose 0.5 per cent at $US55.47.
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