Johnson & Johnson to Pay $1.5B+ for Marketing Drug

Johnson & Johnson -- the company that helped you shampoo with "no more tears,"  fight acne , and heal pretty much every wound t

hat didn't require stiches -- is close to a settlement with the federal government. It's going to pay a fine of more than $1.5 billion, sources say.

For, essentially, speaking.

The case comes out of J&J's prescription drug business. The Wall Street Journal explains :

Under federal law, drug makers can market medicines only for uses approved by the U.S. Food and Drug Administration, though doctors can prescribe drugs for unapproved, or off-label, uses. The largest illegal-drug-marketing settlement to date was in 2009, when Pfizer Inc. agreed to pay $2.3 billion to resolve an investigation into the promotion of now-withdrawn painkiller Bextra and other drugs.

Risperdal had been J&J's top-selling drug with $2.2 billion in sales in 2007, the year before it lost U.S. patent protection. The medicine treats the symptoms of mental illnesses such as schizophrenia, bipolar mania and irritability in autistic patients.

For years, J&J has been facing probes and lawsuits over whether it illegally marketed Risperdal ...

As I said, for speaking: The drug was legal to sell and legal to use, but J&J is facing charges that it illegally told people about some ways to use it -- ways other people could legally discuss -- with the intent of helping even more people and making even more money. And it was illegal for J&J to spread this information not because it was false, nor even because the government had concluded it was false, but because the government had not been convinced that it was true and therefore had not given J&J permission to say it.

A felony conviction -- yes, speaking without permission can apparently be a felony if you're in the drug business -- could bar J&J from selling its products under government health programs such as Medicare. Considering how much of the money for medical care goes through the federal government, that's a lot of business J&J could lose, a lot of money it could be prevented from making, a lot of people it could be prevented from helping. So even if J&J is innocent, the risks of going to trial might be great enough to make paying a billion-dollar fine seem a better bet.

The Associated Press says Arkansas has already imposed a fine of more than $1 billion on J&J for its marketing of the same drug . The charges there may involve actual fraud; it's not clear what the specific actions at issue were. But merely speaking without government permission is not fraud and should not be a crime.

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