J&J To Settle Criminal Charge Over Risperdal Marketing, While 40 States Plan Lawsuits

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J & J To Settle Criminal Charge Over Risperdal Marketing, While 40 States Plan

Lawsuits 1 Comment

By Ed Silverman // August 9th, 2011 // 6:55 pm

As & attempts to resolve a raft of litigation and

government investigations related to Risperdal marketing, attorney

generals from approximately 40 states are deciding whether to pile on as they

pursue a coordinated civil investigation into potential consumer

fraud violations, according to a filing with the Securities and Exchange

Commission.

In order to make their case, the states and J & J reached a

so-called tolling agreement, which essentially delays the expiration of a

statute of limitation for filing a lawsuit. The disclosure was made in a J & J

filing with the US Securites and Exchange Commission (see page 32). The move is

the latest indication J & J is working toward a global

settlement. By reaching a tolling agreement, J & J is creating more

opportunity to allow negotiations to be completed. Without such a deal,

the states would be forced to file lawsuits in order to preserve their

rights.

At the same time, the health care giant disclosed that an agreement

in principle was reached to settle a misdemeanor criminal charge related to

marketing its Risperdal antipsychoticl, but certain undisclosed

issues remain open before a settlement can be finalized, according to

the SEC filing.

You may recall that, earlier this year, J & J set aside an

unspecified amount of money to be used for settlements. The Office of

the Inspector General of the United States Office of Personnel

Management, the US Department of Justice, the US Attorney in

Philadelphia and Attorneys General of multiple states have been probing

off-label Risperdal marketing for years (read here).

The states may be smelling blood. In June, a South Carolina judge

ordered J & J to pay $327 million for deceptive Risperdal marketing,

and last fall, a Louisiana jury ordered J & J to pay $257.7 million in damages for

making misleading safety claims, although $73 million in

legal fees were later added. In explaining his decision, the South

Carolina judge labeled J & J actions “detestable†(see this).

In terms of simple math, the loss in South Carolina can be looked at

least two ways - the average loss has so far cost about $150 million

(four state lawsuits) or roughly $300 million (when considering two

actual defeats). Using this figure as a hypothetical, if one were to

multiply either figure times another half dozen losses in state courts,

J & J is rapidly approaching at least $1 billion in damages. And

reports have suggested the health care giant may settle for $1 billion,

although the tab may now be rising.

Meanwhile, Massachusetts earlier this month filed a lawsuit alleging

that & illegally marketed its Risperdal

antipsychotic to the detriment of its citizens. This time, Massachusetts alleges

J & J promoted the drug to treat elderly dementia and various unapproved uses in

children and adolescents (read here). Other states, including Alaska, Arkansas,

Mississippi, Montana, New

Mexico, Pennsylvania and Utah, also have pending lawsuits.

J & J has scored some victories. A lawsuit filed by Pennsylvania

officials, who charged J & J hid the risk of diabetes and misled state regulators

into paying millions more than they should have for the

medicine, was dismissed. And two years ago, a West Virginia judge

awarded $3.95 million, after finding J & J misled doctors about risks

and benefits, although the state dropped its claim after J & J won an

appeal.

As we have noted previously, J & J will appeal the losses in

Louisiana and South Carolina, and could possibly pay much less than the

penalties awarded. By suggesting a global deal might total $1 billion or so, the

health care giant may try to get the amounts reduced on a

proportionate basis, and use the same argument in talks with any state

that does not join a settlement. But if more states file lawsuits, the

costs could rise. Perhaps the timing of the Massachusetts lawsuit is not a

coincidence.

One looming case is scheduled to go to trial this November in Texas.

And J & J potentially faces a much bigger liability in that Texas has a much

larger population than Louisiana and South Carolina and,

therefore, would encounter a heftier payout. This case, by the way, also

involves statutory and common law fraud issues that were not raised in

the other states. The focus is on the so-called TMAP program that was

allegedly designed to boost Risperdal prescriptions by unduly

influencing University of Texas professors and state officials to

endorse the effort and promote it nationally.

 

Peace & Health,

Dr. Hannifin

www.DrH.com

www.AutismRecoveryCenter.com

Your talent is God's gift to you. How you use it is your gift to God. -unknown