Johnson & Johnson (J&J) agreed to resolve criminal and civil probes into the marketing of Risperdal, an antipsychotic drug, and other medicines by paying more than $2.2 billion in fines.
J&J’s Janssen unit (a subsidiary) will plead guilty to a misdemeanor criminal charge over misbranding Risperdal for uses not approved by the Food and Drug Administration (FDA), including treating elderly patients with dementia. Janssen will pay a $334 million fine and forfeit $66 million.
J&J and three of its subsidiaries will pay more than $2.2 billion to settle the investigations. Janssen also settled civil claims that it marketed Risperdal without approval for the elderly, children and the mentally disabled, and that it paid kickbacks to physicians and to Omnicare Inc., the largest pharmacy for nursing homes.
J&J Still Denies Any Wrongdoing: Hubris
According to J&J, Janssen “accepts accountability” for the actions described in the misdemeanor plea, the civil settlement “is not an admission of any liability or wrongdoing, and the company expressly denies the government’s civil allegations.”
Third-Biggest Pharmaceutical Fine
The agreement is the government’s third-biggest with a pharmaceutical company, the largest being the $3 billion settlement that GlaxoSmithKline Plc reached last year over the marketing of medicines including Paxil, Avandia and Wellbutrin, and the $2.3 billion fine that Pfizer Inc. paid in 2009 over the marketing of the painkiller Bextra and other drugs.
The civil settlement, which involves the U.S. Justice Department and 45 states, resolves three lawsuits filed by whistle-blowers under the False Claims Act, which lets citizens sue on behalf of the government and join in any settlement.
Risperdal Side Effects Include Diabetes and Breast Enlargement in Boys
Risperdal has been linked to excessive weight gain, breast growth in boys and diabetes. The drug, once J&J’s biggest seller, generated worldwide sales of $24.2 billion from 2003 to 2010, reaching $4.5 billion in 2007.
The FDA approved Risperdal in 1993 for “the management of the manifestations of psychotic disorders.” That market is limited, and Janssen soon sought to sell Risperdal for bipolar disorder, dementia, mood and anxiety disorders and other unapproved uses, according to court filings by Department of Justice.
J&J Marketing Scheme: ElderCare Force
In 1998, J&J started an ElderCare sales force that promoted Risperdal to nursing homes. In 1999, the FDA said that J&J’s marketing campaign was “false, misleading, and/or lacking in fair balance.”
“This campaign, with a theme of ‘Hostile Outside, Fragile Inside,’ used material which stated or implied that Risperdal had been found to be safe and effective for the elderly and in specifically treating hostility in the elderly, but in fact the elderly had not been specifically studied in the clinical trials for Risperdal,” according to government filings.
Arkansas, Louisiana and South Carolina Continue to Fight J&J
The settlement won’t resolve suits brought by Arkansas, Louisiana and South Carolina, where the company has appealed or has said it will appeal judgments over Risperdal sales.
In 2012, a judge in Arkansas ordered J&J to pay $1.2 billion in fines over Risperdal marketing. That verdict came three months after J&J decided to end a trial in Texas over the drug’s sales with a $158 million settlement.
In June 2011, a judge in South Carolina ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. In 2010, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials over J&J’s Risperdal marketing campaign in the state.
The criminal case is U.S. v. Janssen Pharmaceuticals, 13-cr-605, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).
