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Johnson & Johnson to Pay $52 Million in Price-Fixing Suit

Washington, DC: A Pennsylvania judge has found Johnson & Johnson (J&J) falsely reported the prices of its drugs and consequently ordered the company to pay $52 million in damages and penalties. A reported $45 million will go to Medicaid and the PACE prescription drug program for senior citizens.

The case was brought against J&J in 2004, by Pennsylvania Attorney General Tom Corbett, over allegations that Johnson & Johnson, several of its subsidiaries and 14 other drug companies manipulated a pricing benchmark known as the "average wholesale price." Corbett's office has recovered $49 million so far and other cases are pending.

"Medicaid and PACE serve the most vulnerable Pennsylvanians, including low income families and seniors," Corbett said. "Taking money from these programs by manipulating and inflating drug prices is simply unconscionable."

Michael Heinley, a spokesperson for J&J, said the company will appeal the judge's decision if necessary. In a separate statement, J&J said that the trial record shows it has acted responsibly in its drug pricing and that the state made its reimbursement decisions knowing that the average wholesale price was "a starting point for determining drug reimbursements."

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Last updated on Dec-20-10