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Johnson & Johnson to pay $2 billion for false marketing

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NEW YORK (CNNMoney) - Johnson & Johnson will pay more than $2 billion to settle charges that the company marketed drugs for unapproved uses and paid "kickbacks" to doctors and nursing homes.

The penalties announced Monday by the Justice Department involve fines and forfeiture to the federal government and several states. It involves the schizophrenia drugs Risperdal and Invega, and the heart failure drug Natrecor, the company and Attorney General Eric Holder said.

The company and two subsidiaries "lined their pockets at the expense of American taxpayers, patients and the private insurance industry," Holder said in announcing the $2.2 billion settlement.

The penalty amounts to one of the country's largest health care-related settlements, the Justice Department said.

In 2011, Johnson & Johnson paid  $1.2 billion in fines for 239,000 violations of the state's False Claims Act and 4,600 violations of the Deceptive Trade Practices Act involving its marketing of Risperdal.

Johnson & Johnson defended Risperdal "as safe and effective for its approved indications" and said two decades of research shows it is "an important treatment option for people with serious mental illness."

Risperdal was approved to treat schizophrenia, but was marketed to doctors as a treatment for elderly patients with dementia. The company also knew patients on the drug were at increased risk for developing diabetes, but did not publicly acknowledge the risk.

The company promoted the drug in nursing homes in part by sending paid pharmacists to review patient records.

"Although consultant pharmacists purported to provide 'independent' recommendations based on their clinical judgment, J&J viewed the pharmacists as an 'extension of [J&J's] sales force,'" the Justice Department said.

Johnson & Johnson and another subsidiary also marketed Risperdal and Invega as safe for elderly patients, a claim the FDA considered "misleading." This was done in part through an "ElderCare sales force," federal officials said.

The heart failure drug Natrecor was marketed as a treatment for patients with less severe heart failure than mentioned in its FDA approval, according to the DOJ statement.

The settlement includes payments to the federal government and several states by Johnson & Johnson, as well as subsidiaries Janssen Pharmaceuticals and Scios. Janssen will also plead to a misdemeanor misbranding charge.

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