John­son & John­son to set­tle mar­ket­ing al­le­ga­tions

Modern Healthcare - - LATE NEWS -

John­son & John­son agreed to pay $158 mil­lion to set­tle al­le­ga­tions in­volv­ing off-la­bel mar­ket­ing of its an­tipsy­chotic drug Ris­perdal to physi­cians in Texas, which the Texas at­tor­ney gen­eral said led the state’s Med­i­caid pro­gram to over­pay for the drug for more than a decade. The state al­leged that Janssen Phar­ma­ceu­ti­cals, a Rar­i­tan, N.j.-based sub­sidiary of John­son & John­son, in­ap­pro­pri­ately en­cour­aged physi­cians to pre­scribe the drug, in­clud­ing to chil­dren for schizophre­nia and the el­derly for de­men­tia, from 1994 to 2008. The Food and Drug Ad­min­is­tra­tion had not ap­proved the drug for those in­di­ca­tions at that time. Texas At­tor­ney Gen­eral Greg Ab­bott, in a writ­ten state­ment, called the mar­ket­ing a “scheme to profit from the Med­i­caid pro­gram by over­stat­ing the safety and ef­fec­tive­ness of an ex­pen­sive drug.” The com­pany did not ad­mit wrong­do­ing in the set­tle­ment, ac­cord­ing to a Janssen spokes­woman. “Set­tle­ments fre­quently are reached to bring to a con­clu­sion a long-stand­ing lit­i­ga­tion where the po­ten­tial fi­nan­cial ex­po­sure to the com­pany is sig­nif­i­cant, the out­come is un­cer­tain de­spite the facts and where there are likely to be long and ex­pen­sive ap­pel­late ac­tiv­i­ties re­gard­less of the out­come at trial,” Janssen said in a state­ment. The $158 mil­lion will be al­lo­cated to the whis­tle-blower who ini­ti­ated the law­suit in 2004; his at­tor­neys; the state of Texas; and the fed­eral gov­ern­ment. John­son & John­son faces sev­eral law­suits in­volv­ing Ris­perdal and af­ter a trial last year in South Carolina was or­dered to pay $327 mil­lion. In Au­gust, the com­pany dis­closed in a se­cu­ri­ties fil­ing that it had reached an agree­ment in prin­ci­ple with the U.S. Jus­tice Depart­ment to set­tle a re­lated mis­de­meanor charge.

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