J&J unit ordered to pay $8B over anti-psychotic drug

Johnson & Johnson’s Janssen unit was hit with an $8 billion punitive-damages verdict — the largest jury award in the U.S. this year — over its alleged mishandling of an anti-psychotic drug blamed for causing adolescent boys to grow female-sized breasts.

A state court jury in Philadelphia Tuesday concluded the Janssen’s wrongful marketing of its Risperdal drug to teens warranted the punishment award in the first Pennsylvania case in which such damages could be awarded under an appellate ruling.

The award came in the case of Nicholas Murray, a Maryland resident who began taking Risperdal as a child to help battle autism. A separate jury awarded Murray $1.75 million in actual damages in 2015 on his claims the drug caused him to develop female breasts. That award later was cut to $680,000 under Maryland law.

The verdict, which is unlikely to be upheld on appeal, may nonetheless sound an ominous warning for J&J since the company still faces more than 13,000 suits over its Risperdal marketing and failure to warn teens about its health risks, according to the company’s filings with the U.S. Securities and Exchange Commission. More than 7,000 of those cases are pending in state court in Philadelphia, according to court records.

Given the number of trials J&J and Janssen still face in Philadelphia, the $8 billion verdict may prompt consideration of setting up a global settlement of the Risperdal litigation, said Carl Tobias, a University of Richmond law professor who teaches about mass torts. The company already has settled some cases, he noted.

“That type of punitivedamage award will encourage more plaintiffs and their counsel to pursue more cases vigorously,” he said. “It may make sense to get out now.”

J&J officials vowed to appeal the ruling and said the punitive award was excessive compared to the actual-damage figure. The drugmaker also faulted a judge’s refusal to allow it to present mitigating evidence about Janssen’s handling of the drug.

“This decision is inconsistent with multiple determinations outside of Philadelphia regarding the adequacy of Risperdal’s labeling, the medicine’s efficacy, and findings in support of the company,” Ernie Knewitz, a J&J spokesman, said in an interview.

J&J shares fell $3.11, or 2.4%, to $128.73 in premarket trading on Wednesday.