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Ark. Judge Socks Johnson & Johnson With $1.1 Billion Penalty

Filed by KOSU News in Business.
April 11, 2012

A state judge in Arkansas ordered Johnson & Johnson to pay a $1.1 billion fine after a jury found the company had minimized the risks of its antipsychotic drug Risperdal.

Judge Tim Fox determined that J&J and its Janssen Pharmaceuticals unit repeatedly broke the state’s Medicaid fraud law, the Associated Press reports. One big issue: a letter sent to thousands of doctors in the state 2003 that said Risperdal was safer than rival medicines, according to Bloomberg.

Each Risperdal prescription for a Medicaid patient during a 3½-year period represented a violation of state law. Multiply $5,000, the minimum fine, by more than 200,000 prescriptions, and you get the lion’s share of the penalty.

“We are disappointed with the judge’s decision on penalties,” the company said in a statement. J&J is asking for a new trial. If that’s denied, the company will appeal. The company statement said Janssen presented plenty of evidence during the trial to show that it had “acted responsibly and fully complied with all laws and regulations regarding its antipsychotic prescription medication Risperdal.”

The company also faulted the state’s case, saying it hadn’t showed that any Arkansas patients were harmed by Risperdal, or that doctors or the state Medicaid program had been misled. What’s more, J&J says Arkansas Medicaid spent just $8.1 million on Risperdal prescriptions during the period at issue in the trial.

The drug, a so-called second generation antipsychotic, is generic now (as risperidone). But for years it was one of the company’s biggest sellers. In 2007, the drug’s best year, worldwide Risperdal sales hit $4.5 billion.

But Risperdal and drugs like it were linked to weight gain and an increased risk for diabetes in patients taking them.

The Arkansas jury’s decision and the judge’s penalty are just the latest legal setbacks for Risperdal. A South Carolina judge upheld a $327 million penalty against J&J and its Janssen unit late last year. Previously, the judge overseeing the case had called J&J’s behavior in the marketing of the drug “detestable.”

Earlier this year, the company agreed to pay $158 million to settle charges it improperly marketed Risperdal in Texas and caused the state’s Medicaid program to spend too much on the medicine. [Copyright 2012 National Public Radio]

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