Feds, J&J Agree to $2.2 Bil. Settlement in Risperdal Suit

, The Legal Intelligencer


Subsidiaries of Johnson & Johnson have agreed to pay $2.2 billion to resolve a suit involving, among other things, the marketing for off-label use of the antipsychotic drug Risperdal.

It is the biggest settlement yet for a single drug, said Zane Memeger, U.S. attorney for the Eastern District of Pennsylvania, where the case was handled.

Janssen Pharmaceuticals is scheduled to plead guilty Thursday to a charge related to its marketing of Risperdal, which had been approved by the U.S. Food and Drug Administration for treatment of schizophrenia, but was marketed for elderly patients with dementia and mentally-ill children.

"The Department of Justice takes the FDA procedure seriously," Memeger said following a formal announcement of the deal in Washington, D.C., on Monday. "Companies that decide to put profit over patients will be prosecuted."

Janssen will pay $334 million as a criminal fine, $66 million as a substitute for forfeiture of the drugs, and it has agreed to a separate civil settlement with the federal government and several states for about $1.3 billion, according to the plea and sentencing agreement.

Johnson & Johnson will also pay $149 million to settle claims related to kickbacks it allegedly paid to a long-term care pharmacy, according to Attorney General Eric Holder Jr., who gave a prepared statement at a press conference Monday morning.

"In addition to these claims, we allege that Johnson & Johnson and its subsidiary, Scios Incorporated, promoted the heart failure drug Natrecor for off-label uses that caused patients to submit to costly infusions of the drug—without credible scientific evidence that it would have any health benefit for those patients," Holder said in the statement. "In a separate matter that was resolved in 2009, Scios pleaded guilty to misbranding Natrecor and paid a criminal fine of $85 million. To resolve current allegations associated with the settlement we announce today, the companies have agreed to pay an additional $184 million."

In March 2012, Johnson & Johnson had paid $118 million to resolve similar claims about Risperdal in Texas—that amount is included in the $2.2 billion total.

Starting in 2004, relators began filing qui tam actions over the marketing of Risperdal. Four cases were consolidated in the U.S. District Court for the Eastern District of Pennsylvania—Janssen is a Pennsylvania corporation headquartered in New Jersey.

Whistleblowers from the Eastern District of Pennsylvania will be awarded $112 million—Victoria Starr, the first to file, will be getting $110 million from the federal government's share of the Risperdal settlement, and Kurtis Barry will be getting $2 million from the federal government's share of the Invega settlement, according to the U.S. Attorney's Office in Philadelphia.

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