J&J faces federal probe over alleged relationships with PBMs

JNJ HQ

Johnson & Johnson ($JNJ) is facing a federal probe over its relationships with pharmacy benefit managers. The demand for documents is the latest Department of Justice move to investigate a drugmaker under the False Claims Act.

The U.S. Attorney’s office sent J&J’s Janssen Pharmaceuticals unit a civil investigative demand for information about its contractual relationships with PBMs. The demand covers Jan. 1, 2006 to the present and "certain pharma products." It was issued in connection with an investigation under the False Claims Act, the company disclosed in its quarterly filing with the Securities and Exchange Commission.

J&J is staying quiet about the probe. "The statement in the filing is accurate, and we are cooperating fully in the process," the company told FiercePharma in an email. "We have nothing further to add at this point."

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J&J is not the only company dealing with federal probes. Pharma peers including Valeant ($VRX) and Horizon Pharma ($HZNP) have also come under fire during the past year from lawmakers, and across the pharma industry, companies have agreed to pay fines and penalties to settle FCA and kickbacks allegations.

The demand for information about relationships with PBMs appears to be unusual, however. If the Justice Department chooses to zero in on pharma's contracts with those companies, which negotiate prices and set reimbursement conditions, other drugmakers could find themselves roped in.

In October, Valeant revealed that it got subpoenas from the U.S. Attorney’s office for the Southern District of New York and the U.S. Attorney’s office for the District of Massachusetts for documents about its financial support to patients, drug distribution and pricing decisions. The same month, the company cut ties with specialty pharma Philidor amid rumors that the pharmacy changed doctors’ orders to get more money from insurers.

Horizon has also encountered federal pushback. In March, the company said that the U.S. Attorney’s Office for the Southern District of New York was investigating its financial support to patients and its alleged ties to specialty pharmacies.

- read the J&J filing

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