Healthy Skepticism Library item: 17052

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Electronic Source

Edwards J
Risperdal Kickback Case: J&J Tried to Freeze Out Lilly; 72% Market Share Not Good Enough!
BNet 2010 Jan 20
http://industry.bnet.com/pharma/10006189/risperdal-kickback-case-j-72-market-share-not-good-enough/

Full text:

How did Johnson & Johnson (JNJ)’s relationship with nursing home pharmacy provider Omnicare become the target of Justice Department allegations that it was based on kickbacks? Here’s one possible answer: Greed.

According to J&J’s internal documents, the company appeared to have borrowed the credo of Gore Vidal (pictured): “It is not enough to succeed. Others must fail.”

The documents – filed as part of the a DOJ complaint that alleges J&J’s rebates to Omnicare for drugs such as the antipsychotic Risperdal were illegal kickbacks that artificially increased Omnicare’s annual purchases of J&J drugs from approximately $100 million to more than $280 million – show that simply being the top seller in Omnicare’s massive network of nursing home pharmacies was not enough. The company apparently wanted its rivals – such as Eli Lilly (LLY)’s Zyprexa – frozen out.

In a letter from Omnicare svp Tim E. Bien to J&J long term care account director Bruce Cummins, Omnicare expressed how “angry” it was over J&J pressuring Omnicare to end its $4 million contract with Lilly. Bien wrote:

Your statement was:

“We want to see the contractual agreement with Zyprexa to end. We remain firm in this position.”

Bien noted that J&J’s position was the equivalent of Omnicare asking J&J to end its relationships with all other pharmacies – completely untenable. He then reminded J&J that Omnicare was spending $173 million a year on J&J products, and only $127 million on the nearest competitor. Also:

Risperdal has over a 30-point market share advantage in Rx’s compared to Zyprexa with Omnicare (including all Antipsychotics).

Risperdal had a 72.3 percent market share, Bien said:

Therefore, I am angry by Janssen’s stance [Janssen is J&J’s Risperdal unit]. We all need to keep in mind the very successful relationship we have built together.

Download Bien’s letter to Cummins here.