Johnson & Johnson Settles Texas Lawsuit For $158M

AUSTIN (AP) – A lawsuit in which Texas accused Johnson & Johnson of plundering the state Medicaid program by overstating the safety of an expensive anti-psychotic drug and improperly influencing officials and doctors to push the medication has been settled for $158 million, a subsidiary of the health care giant and state officials announced Thursday.

Texas had been seeking up to $1 billion from the drug maker.

Janssen Pharmaceuticals, Inc., one of the J&J subsidiaries that had been sued, said in a statement it will pay $158 million in full resolution of all claims in Texas.

The settlement represents a resolution to claims brought by Texas for alleged Medicaid overpayment during the years 1994-2008, the company said.

“Janssen is committed to ethical business practices, and has policies in place to ensure its products are only promoted for their FDA-approved indications,” the company statement said.

Tom Kelley, a spokesman for the office of Texas Attorney General Greg Abbott, which was leading the case on behalf of the state, confirmed the settlement but declined further comment.

A court hearing in which the settlement was to be announced was pending Thursday morning. Testimony in the trial began Jan. 10.

A whistle-blower filed the lawsuit, then Texas joined it. The lawsuit is one of dozens of pending state and federal cases alleging illegal marketing practices and kickbacks in an effort to boost Risperdal over competing drugs. Risperdal is a pill for schizophrenia and bipolar disorder.

Lawyers for Abbott’s office and whistle-blower Allen Jones accused Johnson & Johnson and some of its subsidiaries of committing fraud against Medicaid, the joint state-federal health care program for the poor, by making false or misleading statements about Risperdal and its safety, cost and effectiveness compared to other drugs in the 1990s.

Risperdal is used to treat schizophrenia and bipolar disorder.

At the start of the trial, lawyers for the New Brunswick, N.J.-based health care giant had insisted the company did nothing improper in marketing the drug.

The lawsuit was originally filed in 2004 by Jones, a former employee of the Office of Inspector General in Pennsylvania, who said he learned of Johnson & Johnson’s actions in Texas while investigating similar claims in his home state. Texas joined the case in 2006.

Last year, a South Carolina judge ruled Johnson & Johnson must pay a $327 million civil penalty after a jury found it guilty of overstating the safety and effectiveness of Risperdal. In 2010, a Louisiana jury found the company violated that state’s Medicaid fraud act and awarded it $258 million in damages.

The company is appealing the Louisiana verdict and has said it will appeal the South Carolina verdict as well.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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  • FedUpTxn

    This happens far more than the public would like to believe. Clinical trial fraud, under reporting of adverse side effects, false reporting to the FDA, falsification of medical records, lying to patients and doctors alike. This is an industry that is out of control and morally bankrupt.

  • WakeUp

    Agree FedUpTxn, but I’m also out to hang those doctors and state officials who got bought off by the drug companies. Takes 2 to tango and if only 1 does then the public is not harmed. So it is not only the case of 1 being foul (drug company), it’s the case of corrupt doctors and state officials also who need to face the music also.

  • Daniel Haszard

    Risperal reproached.
    Same saga here as Eli Lilly Zyprexa.

    Johnson and Johnson is a trusted brand we associate with babies.
    Risperdal,Zyprexa,as well as the other atypical antipsychotics, are being prescribed for children, even though this is an unapproved, off-label use. An estimated 2.5 million children are now taking atypical antipsychotics. Over half are being given them for Attention Deficit Hyperactivity Disorder,many of these foster children.
    Weight gain, increases in triglyceride levels and associated risks for (life-long) diabetes and cardiovascular disease.
    –Daniel Haszard
    *Tell the truth don’t be afraid*

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