Drugs are approved by the Food and Drug Administration (FDA) to treat specific diseases and conditions. While doctors are free to prescribe them for other diseases, drug companies are prohibited from promoting those other uses, since they have not been tested by the FDA.

Johnson and Johnson and its subsidiary, Janssen Pharmaceuticals Inc., were accused of marketing Risperdal for off-label uses, making false and misleading statements about its safety and paying illegal kickbacks to health care professionals and long-term care pharmacies to induce them to promote or prescribe Risperdal to patient populations, such as children, adolescents and the elderly, for which there was no FDA approval. The investigation resulted from four whistleblower lawsuits that alleged the companies paid illegal kickbacks to health care professionals and long-term care pharmacies.

These companies announced they have finalized settlement agreements with the U.S. Department of Justice (DOJ) and 45 states resolving federal investigations and state Medicaid claims related to past promotional practices of RISPERDAL® from 1999 through 2005, and other matters.The resolution includes total settlement amounts of approximately $2 billion to the federal government and state Medicaid programs.

As part of the resolution, Janssen will plead guilty to a single misdemeanor violation of the Food, Drug and Cosmetic Act for past promotional practices. Janssen accepts accountability for the actions described in the misdemeanor plea. The settlement of the civil allegations is not an admission of any liability or wrongdoing, and the Company expressly denies the government’s civil allegations.

The resolution also includes a five-year corporate integrity agreement between the Office of Inspector General of the U.S. Department of Health and Human Services and Johnson and Johnson. Under the criminal resolution, Janssen will pay $400 million and plead guilty to a one-count misdemeanor misbranding charge. Under the civil settlement, Janssen and Scios will pay approximately $1.6 billion to settle three pending civil False Claims Act cases in federal district courts related to RISPERDAL and INVEGA, NATRECOR, and Omnicare.

But the consumer group Public Cititzen said the settlement was too lenient.

“Johnson and Johnson’s status as a repeat offender demonstrates that despite the seemingly large sums, the fines imposed on pharmaceutical companies for dangerous and illegal conduct pale in comparison to the profits generated from such activity,” said Sammy Almashat, Researcher, Public Citizen’s Health Research Group. “Global sales of Risperdal totaled $24 billion between 2003 and 2010, ten times the settlement amount.”

“Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become common, companies will continue defrauding the government and putting patients’ lives in danger,” Almashat said. The settlement is nothing new for the company. According to a 2012 Public Citizen report, Johnson and Johnson racked up $2.3 billion in criminal and civil penalties for various allegations of wrongdoing from 1991 through July 18, 2012.