In its first response to federal claims that it paid kickbacks to boost sales of Risperdal and other meds, Johnson & Johnson (NYSE: JNJ) said that it was only paying perfectly legal rebates--and that the government's suit should be dismissed. "This case is a remarkable attempt to attack common discounting arrangements that are expressly protected under federal and state law," J&J's lawyers contend.
The Justice Department went after the pharma giant for allegedly paying millions of dollars to persuade Omnicare, a nursing-home pharmacy, to recommend J&J drugs to its nursing home clients. Among the drugs J&J was pushing was Risperdal, an atypical antipsychotic. For its part, Omnicare settled federal claims that it took kickbacks from J&J, but it didn't admit wrongdoing as part of that deal.
At issue are market share rebates J&J paid to Omnicare; the company says in its legal response that such rebates are "standard industry practice and absolutely essential to our health care system," Bloomberg reports. However, the government deems the payments "kickbacks" and says the money wrongly influenced healthcare providers.
- read the Bloomberg story