Johnson & Johnson (JNJ) and the state of Texas won court approval of the company’s agreement to pay $158 million to settle claims that the drugmaker fraudulently marketed its Risperdal anti-psychotic drug.
J&J reached the settlement in January to resolve claims it defrauded the state’s Medicaid program by promoting Risperdal for uses not approved by U.S. regulators. Texas also claimed the New Brunswick, New Jersey-based drugmaker downplayed the health risk of Risperdal.
Travis County District Judge John Dietz in Austin, Texas, approved the settlement today following a meeting in court with lawyers. J&J and its Janssen unit denied any wrongdoing in the final agreement.
Under the agreement, J&J and Janssen will pay $158 million, with 40 percent going to the state, 31 percent to the U.S., 17 percent to whistle-blower Allen Jones, who brought the lawsuit, and the rest to his attorneys, according to Tommy Jacks, one of Jones’s lawyers.
The settlement, reached during trial, was the first time J&J and its Janssen unit settled a state’s claims over Risperdal. The company lost jury trials in South Carolina and Louisiana over Risperdal marketing. Opening statements in a trial in Arkansas began this week.
The U.S. has been investigating Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, J&J executives said last year in a U.S. Securities and Exchange Commission filing.
The U.S. Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys generals.
In June, a South Carolina judge ordered J&J to pay $327 million after a jury found the drugmaker liable for damages over Risperdal marketing. A Louisiana jury in October 2010 ordered the company to pay $257.7 million over Risperdal sales. The judge later added $73.3 million in attorneys’ fees and costs. J&J is appealing both judgments.
J&J and Janssen also have been sued over Risperdal marketing by Alaska, Arkansas, Louisiana, Montana, New Mexico, Pennsylvania and Utah. The state of West Virginia dropped its Risperdal suit after a judge’s $3.95 million verdict in 2009 against the company was reversed on appeal.
Texas joined a lawsuit filed in 2004 by Jones, an ex- investigator for the Pennsylvania Office of Inspector General. Jones said he was fired after probing company payments to a top pharmacist in Pennsylvania’s government who hid the money.
Jurors in Austin, Texas, began hearing evidence on Jan. 10 about Janssen’s efforts to promote Risperdal, which the Food and Drug Administration approved in 1993 for uses including schizophrenia. The suit was settled Jan. 19.
The Texas case is Texas v. Janssen LP, D-1GV-04-001288, District Court, Travis County, Texas (Austin).
Shezad Malik is an Internal Medicine and Cardiology specialist, a licensed Texas Medical Doctor and Defective Medical Device and Dangerous Drug Attorney. Dr Shezad Malik Law Firm has offices based in Fort Worth and Dallas and represents people who have suffered catastrophic and serious personal injuries including wrongful death, caused by the negligence or recklessness of others.