A Johnson & Johnson subsidiary and a California investment firm have agreed to an $11.5 million settlement resolving whistleblower claims over a cancer treatment system that was allegedly marketed off label to children.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania, which announced the settlement, said J&J subsidiary Medical Device Business Services Inc. will provide $10 million toward the settlement, while The Gores Group, an investment firm based in Los Angeles, will pay $1.5 million.
The settlement stems from claims brought under the False Claims Act that attorneys from Philadelphia-based Ross Feller Casey initially filed before the government joined the suit.
“This case is a testament to the powerful public interest served by a collaboration between government enforcement agencies and dedicated private citizens,” Ross Feller Casey attorney Brian McCormick said in a statement from the the firm announcing the settlement. “The False Claims Act worked as designed by returning much-needed taxpayer dollars to the U.S. Treasury and protecting our most vulnerable citizens, including children.”
According to the U.S. attorney’s statement, issued Nov. 19, the plaintiffs alleged that between 2006 and 2015, West Chester, Pennsylvania-based pharmaceutical company Therakos, which was previously owned by a former J&J subsidiary, improperly promoted its system for treating lesions that can develop from cutaneous T-cell lymphoma. Specifically, the company marketed the drug and device system to pediatric patients for treatments that were not approved by the U.S. Food and Drug Administration.
The Fed’s statement noted that the system was not approved for use in children, and that the improper promotion caused false claims to be submitted to Medicaid, the Federal Employee Health Benefits Program and Tricare.
“While physicians are free to exercise their independent medical judgment to prescribe medications for uses beyond FDA-approved indications, pharmaceutical and device companies cannot interfere with doctors’ judgment by allegedly pushing the sale of their drugs or devices for non-FDA approved uses, especially in vulnerable populations,” said U.S. Attorney William McSwain in the government’s statement. “That is what allegedly happened here, and my office will continue to investigate such cases and hold companies accountable when there could be an effect on pediatric or other vulnerable patients.”
According to Ross Feller’s statement, the lawsuit was filed in 2012 in the U.S. District Court for the Eastern District of Pennsylvania after two former Therakos employees brought the issue to light. After investigating the claims, the federal government, along with 30 participating states, joined the settlement. The two whistleblowers will split more than $2.5 million from the settlement, the statement noted.
For much of the time that the improper marketing was ongoing, Therakos was part of a J&J subsidiary, but that company was sold to The Gores Group in 2013, which then sold the company in 2015 to another firm that was not part of the settlement.
David Robbins of Perkins Coie in Seattle handled the case on behalf of The Gores Group.
“My client explicitly denied in the settlement agreement liability and any wrongdoing and the allegations that were made against it,” he said. “It settled following an evaluation of the expenses of litigating.”
Mark Jensen of King & Spalding in Washington, D.C., represented J&J. He did not return a call seeking comment.