Johnson and Johnson settles Arkansas Risperdal Suit for $7.8B

6/9/2015

Johnson and Johnson settles Arkansas Risperdal suit for $7.8B. The suit has been ongoing for eight years and the state’s AG alleges that J&J’s marketing of the psychiatric drug was flawed. The AG claims J&J misrepresented the drug’s safety and effectiveness, especially concerning diabetes risks. The state will take $2M of the settlement to cover it legal expenses, which include a private Texas firm as representation.

The drug, manufactured by J&J’s Janssen Pharmaceuticals, is used to treat manic episodes associated with bipolar disorder, schizophrenia and irritability associated with autistic disorder. J&J’s spokesperson was quick to point out that the settlement is not an admission of liability, but is merely to end the long, drawn-out litigation.

All is not well in J&J’s world these days. While Risperdal’s global sales hit a heady $4.5B in 2007, they dropped to $542M by 2011 after the patent expired and generics hit the market.

Not only that, but the Big Pharma giant is being sued by many other states, resulting in multi-million dollar fines ($158M in Texas, alone). It’s managed to appeal some of the fines, such as a $327M fine in South Carolina; however, the lowered fine was still $136M.

Plus, the federal government already took a huge bite out of J&J in 2013, when the company agreed to $2.2B+ in civil and criminal penalties after Janssen pleaded guilty to the criminal misdemeanor of promoting Risperdal for elderly dementia patients. The FDA did not approve that use. The settlement also included civil claims that Janssen was paying kickbacks to doctors and the largest pharmacy servicing nursing homes.

The federal Risperdal settlement was, in 2013, the third largest between the federal government and Big Pharma. A portion was set aside for whistle-blowers who filed the suits.

If that wasn’t enough, a new breed of claim is arising from the morass that is Risperdal: gynecomastia suits. Allegedly, the drug causes enlarged breasts in men, specifically younger patients. It has been claimed that J&J improperly marketed Risperdal for younger patients at a time when the FDA had only approved it for adults.

Frankly, it sounds like J&J is getting exactly what it deserves. I don’t find it too hard to believe J&J is liable in these instances, especially given its less-than-stellar track record for honest business practices.

Source:

J&J Settles Arkansas AG’s Risperdal Lawsuit for $7.8M