Johnson & Johnson Settles Risperdal Case for $158 Million (update)

January 22, 2012  They say everything is bigger in Texas. It seems as though settlement dollars is the exception. Last week, we posted that Texas and Janssen Pharmaceuticals Inc., one of the subsidiaries of healthcare giant Johnson & Johnson, were in litigation regarding false or misleading statements about the safety of Risperdal, an antipsychotic drug. The two sides reached a $158 million settlement in a Medicaid fraud lawsuit on Thursday, allowing the drug maker to pay only a fraction of the potential $1 billion initially sought for improperly marketing its Risperdal antipsychotic drug to state residents on the Medicaid program for the poor, including children.

 

The lawsuit was one of dozens of state and federal cases alleging that the company committed fraud by making false or misleading statements about the safety, cost and effectiveness of the expensive anti-psychotic medication, Risperdal, and providing kickbacks in an effort to boost sales, which ended up costing taxpayers millions of dollars. The lawsuit also alleged the drug maker falsely told doctors Risperdal was safe to use with children when federal regulators had not approved its use.

 

The settlement fully resolves all Risperdal-related claims in Texas, the company said, but is not admitting any liability or fault with the settlement. The agreement applied only to the state of Texas and does not involve other states or federal Risperdal litigation. Even though Johnson & Johnson is a multi-billion dollar pharmaceutical company, it seems odd that they would be willing to pay $158 million to settle the case, even though they will not admit any liability or fault. I’ll leave you to decide whether or not they were responsible.

 

The settlement will be paid to the original plaintiff, his lawyers, the state of Texas, and the federal government, which provides Medicaid reimbursements.

 

The Texas attorney general, who initially called on Johnson & Johnson to repay $579 million that the state’s Medicaid program had spent on Risperdal prescriptions, plus up to $500 million in penalties, called the settlement a warning to drug makers.  Analysts called the $158 million figure a “victory” for Johnson & Johnson, which made billions of dollars off Risperdal, because the deal allowed the company to avoid a much larger verdict in a state with a reputation of being an easy place to win big jury awards.  (The settlement is also far less than the $327 million Johnson & Johnson recently was ordered to pay in South Carolina and the $258 million it was ordered to pay in Louisiana in Risperdal lawsuits.)  As stated by a clinical professor at the University of Michigan’s Ross School of Business, Eric Gordon, “The legal team at Johnson & Johnson is doing high fives.”

 

To many Americans, Johnson & Johnson is the brand we used for our baby products, and has been trusted for so many years. To think that this healthcare giant cared more about the profits than the innocent children and adolescents who were being prescribed Risperdal without approval from the Food and Drug Administration is so horrible.  They certainly got off very easy in Texas! Is this justice?

 

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