Health Inc.

Probes Of Sketchy Drug Sales Nearing Settlement

Eye in a magnifying glass i
Eye in a magnifying glass

Federal probes into overzealous selling of prescription medicines have landed two of America's most prominent corporations in some hot legal water.

Securities filings by Google and Johnson & Johnson earlier this week hinted at the depth of that water. The Wall Street Journal, in two separate stories, provides more details on the companies' alleged missteps.

First, Google. Earlier this week the online powerhouse disclosed that it had set aside $500 million "in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers."

The Journal reports that the U.S. Attorney's Office in Rhode Island and the Food and Drug Administration, plus some other agencies, have been investigating "whether Google knowingly accepted ads from online pharmacies ... that violated U.S. laws ...." The paper says Google is close to settling the matter.

BNET's Jim Edwards has some more details on how it came to this for Google.

Next, Johnson & Johnson. The health care products giant has been under government scrutiny since 2004 for its marketing of antipsychotic Risperdal. In a securities filing this week, the company disclosed it had set aside an unspecified amount of money to settle charges the company marketed Risperdal (and a related drug Invega) for uses that went beyond its approval by the Food and Drug Admnistration, so-called off-label promotion.

The relevant passage of the filing concludes:

If a negotiated resolution cannot be reached, criminal and civil litigation relating to the allegations of off-label promotion of Risperdal and/or Invega is likely.

The Journal, citing people familiar with the matter, says federal prosecutors are looking for a settlement around $1 billion, though the exact figure hasn't been fixed.



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