J&J Said to Settle Texas Risperdal Anti-Psychotic Drug Case

von freakoutcrazy

By Jef Feeley, Margaret Cronin Fisk and David Voreacos

(Updates with case background beginning in second paragraph.)

Jan. 19 (Bloomberg) — Johnson & Johnson agreed to settle Texas officials’ claims that the drugmaker fraudulently marketed its Risperdal anti-psychotic drug, ending a trial over the allegations.

J&J’s settlement will resolve claims it defrauded the state’s Medicaid program by promoting Risperdal for uses not approved by U.S. regulators, including for children with psychiatric disorders, the people said today. The state also claimed New Brunswick, New Jersey-based drugmaker downplayed the risk of Risperdal.

J&J spokeswoman Teresa Mueller didn’t have an immediate comment on the settlement.

J&J, the world’s largest health-care products company, and its Janssen unit agreed to the accord in the middle of a four- week trial of the state’s lawsuit, which sought at least $579 million in damages over the companies’ Risperdal marketing practices, the people said.

The Texas settlement comes less than a month after J&J officials agreed to pay more than $1 billion to the U.S. and a number of states to end a civil investigation into Risperdal marketing practices, people familiar with the matter told Bloomberg News Jan. 6.

The U.S. government has been investigating Risperdal sales practices since 2004, including allegations the company engaged in so-called off-label marketing of the medication, J&J has said in U.S. Securities and Exchange Commission filings. The company said it has been negotiating with the U.S. to resolve the investigation.

The Texas settlement is the first time J&J and Janssen have agreed to resolve a state’s Medicaid fraud claims over Risperdal prescriptions.

Officials in Louisiana and South Carolina sued J&J partly over marketing letters the company sent to doctors in those states touting Risperdal as superior to rival drugs. Those states’ attorneys general alleged the company falsely claimed Risperdal didn’t cause diabetes to charge a premium for the drug.

The Texas case is Texas v. Janssen LP, D-1GV-04-001288, District Court, Travis County, Texas (Austin).