Texas, Johnson & Johnson heading back to court
By Corrie MacLaggan
March 25, 2012
Representatives of Johnson & Johnson and the state of Texas will head back to court on Tuesday over a $158 million settlement agreement announced in January involving the drug Risperdal, a spokesman for Texas Attorney General Greg Abbott said on Sunday. "As far as we knew, we had a solid settlement," said Tom Kelley, Abbott’s spokesman. "We’ll have more information on Tuesday about what has caused (Johnson & Johnson) some concerns."
A spokesman for Johnson & Johnson did not immediately respond to questions about the hearing before state District Judge John Dietz in Austin. Johnson & Johnson said in January that it would pay $158 million to settle a Texas lawsuit that accused the drugmaker of improperly marketing its Risperdal anti-psychotic drug to state residents on the Medicaid health program for the poor.
The settlement would fully resolve all Risperdal-related claims in Texas, the company said at the time. The agreement – the largest Medicaid fraud recovery ever in Texas – was specific to the Lone Star State and did not involve other state or federal Risperdal litigation. The deal marked the first Risperdal settlement with any U.S. state. It settled claims brought by Texas in 2004 involving alleged Medicaid overpayments during the years 1994 to 2008. The settlement was to be paid to the original plaintiff, his attorneys, the state of Texas and the federal government, which provides Medicaid reimbursements, the company said in January.
Tom Melsheimer, a lawyer for plaintiff Allen Jones, said on Sunday that the hearing on Tuesday is "just to finalize the settlement." But Jones, a whistleblower on J&J’s marketing practices, said the sticking point is that Johnson & Johnson wants to reduce the amount of the settlement that he and his attorneys receive. Johnson & Johnson "has reneged on the agreement and it’s back in court," Jones said. "They are trying to produce a chilling effect on the ability of whistleblowers to come forward."