Many top drugmakers have faced allegations that they offered free services as kickbacks to doctors, and Johnson & Johnson is confronting those claims in a newly unsealed whistleblower lawsuit.
In the suit, a former employee says J&J's Janssen unit helped doctors set up high-volume "infusion suites" and offered other services to amp up Remicade and Simponi prescriptions for more than a decade. Johnson & Johnson disclosed the suit in its annual Securities and Exchange Commission (SEC) filing, published Tuesday.
Plaintiff Julie Long alleges Janssen provided “free business operations and practice management services” to induce prescribers to use Remicade and Simponi Aria, two big-selling immunology medicines.
For more than a decade, J&J “effectively became a business partner to rheumatology and gastroenterology practices," according to the complaint, filed in Massachusetts this month. Long first filed a lawsuit under seal way back in October 2016. The U.S. Department of Justice and more than two dozen states declined to intervene after investigating.
A J&J spokeswoman said Wednesday the company believes the lawsuit is "without merit."
"As we have disclosed since 2017, we fully cooperated with a Department of Justice investigation involving management and advisory services provided to certain physician practices that purchased Remicade or Simponi Aria," she added. "After examining the issues, the Department of Justice and all named state attorneys general declined to intervene in a lawsuit brought by a former employee. This lawsuit is now being pursued solely by this former employee."
Long says J&J helped doctors by setting up “in-office infusion suites” for the medicines—designed to maximize volume and profits—and then helped run them smoothly once operational. Once doctors started using the services, they became reliant and used them to grow their own businesses, according to the lawsuit. The suit alleges violations of the False Claims Act.
Long was a Janssen area business specialist from 2003 to 2016 and helped set up the infusion suites, the suit says.
To help set up infusion suites, J&J “provided advice regarding the optimal design and organization of the infusion suites so as to fit in as many infusion chairs as possible and in turn optimize scheduling to maximize the infusion suites’ profitability,” the suit says.
“If patients find an infusion suite to be aesthetically pleasing and comfortable, they will pay more and travel further to receive their infusions there,” according to the lawsuit.
The drugmaker first disclosed the federal investigation on the issue back in 2017. In January, J&J's Janssen unit was served with the unsealed suit, J&J said in its annual SEC filing Tuesday.
J&J’s immunology blockbuster Remicade was once the company’s top medicine by sales, but it has started to slide due to biosimilar competition. Last year, sales of the med fell 18% to $4.38 billion. Sales for Simponi Aria, which treats rheumatoid arthritis, psoriatic arthritis and ankylosing spondylitis, grew 5% last year to $2.19 billion.
Of course, J&J isn’t the first drugmaker to face allegations of providing services to doctors as a form of kickbacks. Back in 2017, Novo Nordisk reached a settlement over allegations of running a “white-coat marketing” scheme by providing "certified diabetes educators" to doctors and their patients. Allergan inked a $13 million settlement the same year.
Separately, a group called the National Healthcare Analysis Group and related organizations sued nearly a dozen companies—Amgen, Biogen, EMD Serono, Teva, AstraZeneca, AbbVie, Otsuka, UCB, Bayer, Eli Lilly and Gilead—for using nurse educators as kickbacks. The feds opted not to participate in those lawsuits after investigating for themselves.