A unit of medical group Johnson & Johnson (JNJ) has been ordered to pay $1.64 billion for illegally promoting the HIV drugs Prezista and Intelence.
Whistleblower Lawsuit
A U.S. District Judge told the drugmaker’s Janssen unit today it had to pay the amount after a jury found it liable in a whistleblower lawsuit. Janssen will have to pay $360 million for violating the federal False Claims Act, with $1.28 billion in civil fines. This works out as $8,000 for each of the 159,574 false claims the jury found were submitted to programs such as Medicare, Medicaid, and the AIDS Drug Assistance Program.
Janssen had been accused by two of its sales representatives of improperly marketing the two drugs for off-label uses, according to Reuters. This included promoting Prezista as “lipid-neutral,” meaning it would not affect cholesterol or triglyceride levels, contrary to its U.S. Food and Drug Administration-approved label.
Healthcare Restructuring
They also claimed that Janssen paid doctors to promote the drugs at dinner and other black-tie events. Jurors found Janssen liable for some off-label claims and not liable for the kickback claims.
The decision comes at an interesting time for U.S. healthcare stocks following the controversial appointment of RFK Jr as Health Secretary. Yesterday, he launched a huge job cull and restructuring of the government’s health department to cut red-tape.
Johnson & Johnson stock was up in early trading despite the court’s decision.
Is JNJ a Good Stock to Buy Now?
On TipRanks, JNJ has a Moderate Buy consensus based on 5 Buy and 8 Hold ratings. Its highest price target is $185. JNJ stock’s consensus price target is $167.36 implying an 1.74% upside.
