AG: J&J must pay $52M in Pa. drug pricing dispute

HARRISBURG — Johnson & Johnson must pay $52 million in damages and penalties after a Pennsylvania judge found the pharmaceutical company falsely reported the prices of its drugs.

Pennsylvania Attorney General Tom Corbett said Friday that a Commonwealth Court judge rendered the verdict last week after a five-week trial in Easton, Pa.

Johnson & Johnson has been ordered to repay more than $45 million to Medicaid and the PACE prescription drug program for senior citizens, along with more than $6.5 million in civil penalties.

In 2004, Corbett's office sued Johnson & Johnson, several of its subsidiaries and 14 other drug companies, alleging they 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."

Johnson & Johnson said in a statement Friday that the trial record shows that 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." The company also said it intends to pursue its arguments before the court during the next phase of the case.

A spokesman, Michael Heinley, said the company will appeal the judge's ruling if necessary.