Court Favors Whistleblower on Johnson & Johnson's Qui Tam Suit

Washington, DCWhistleblower Mark Eugene Duxbury filed a qui tam suit against Johnson & Johnson's Ortho Biotech Products unit, alleging that kickbacks paid by the company led to inflated reimbursements under the federal Medicare program for the elderly and disabled. The pharmaceutical manufacturer appealed in an attempt to stop the suit, but today the US Supreme Court rejected the appeal, thereby allowing Duxbury to sue.

Ortho argued that Duxbury, who filed suit under the False Claims Act in November 2003 after providing the government with information about the company, could not sue because similar allegations had already been disclosed in a previous lawsuit. A Boston federal appeals court, however, said that Duxbury met the Act's requirement that he be an "original source" of the allegations, as he provided the government with his information about the company before filing suit.

The US government sued J&J on January 15, 2010, claiming that the company paid millions of dollars in kickbacks to Omnicare, the nation's largest senior care pharmacy, to buy and recommend J&J drugs, including its antipsychotic Risperdal. The payments allegedly induced Omnicare pharmacies to switch patients from other anti-psychotic medications to Risperdal. J&J argues that it didn't violate the False Claims Act or Anti-Kickback Statute, and that the government seeks to brand allowable rebates as illegal.

In the earlier suit, pharmacist-whistleblower Bernie Lisitza alleged that J&J made quarterly rebate payments on Omnicare's purchases of Risperdal under agreements both parties made in April 1997 and March 2000. Both agreements specified that Omnicare would engage in an "active intervention program" by convincing physicians to prescribe Risperdal and that all competitive drugs be "Prior Authorized for Risperdal failure." The government claimed that Omnicare failed to disclose to physicians that these "interventions" were a condition of it receiving rebate payments. In November 2009 Omnicare agreed to pay $98 million to settle civil claims by the US and several states that it took kickbacks from J&J

Back in November 2006 Omnicare settled another qui tam case—a Medicaid fraud suit for $49.5 million—brought again by Lisitza, who was fired by the company after blowing the whistle on its improper practices. The company was charged with illegally switching drugs, mainly generic forms of Zantac and Prozac, of senior citizens in nursing homes and other facilities.