J&J dodges a bullet…

Posted on Thursday 26 July 2012

A Pennsylvania appeals court handed a legal victory to Johnson & Johnson [JNJ] by upholding the dismissal of the state’s lawsuit accusing the drug maker of improperly marketing the antipsychotic drug Risperdal. The Commonwealth of Pennsylvania had filed suit against J&J in 2007 seeking to recover expenses incurred by the state’s Medicaid program for reimbursing pharmacies for the purchase of Risperdal. The state alleged that J&J had promoted Risperdal for unapproved uses – also known as "off-label" uses – and misrepresented the drug’s safety risks.

Judges in the Philadelphia Court of Common Pleas threw out the lawsuit in 2010, concluding the state didn’t provide sufficient evidence that J&J’s marketing caused doctors to write off-label prescriptions for Risperdal. The state appealed the trial court’s decision. But the Pennsylvania Commonwealth Court on Thursday affirmed the trial-court decisions. The appellate court said that because a drug manufacturer isn’t a provider of medical goods and services to Medicaid recipients, its conduct doesn’t support civil remedies under the state’s Medicaid Fraud Control Act. J&J’s Janssen Pharmaceuticals unit, which marketed Risperdal, said in a statement Thursday:

    "The Commonwealth had no evidence of wrongdoing by our company and no basis for its lawsuit."
An attorney representing Pennsylvania couldn’t immediately be reached. While victorious in Pennsylvania, J&J has had some costly legal losses related to its Risperdal marketing in other states. In April, an Arkansas judge ordered J&J to pay $1.2 billion after a jury found J&J’s past marketing of Risperdal violated the state’s consumer protection laws. J&J previously was ordered to pay $327 million in a South Carolina Risperdal case and $258 million in Louisiana. The company is appealing these cases. In addition, J&J is close to a potential $2.2 billion settlement of a U.S.-led investigation of J&J marketing practices including those for Risperdal, The Wall Street Journal reported last week.
J&J wins Risperdal case in Commonwealth Court
Philadelphia Inquirer
by David Sell
July 26, 2012

Johnson & Johnson celebrated a rare victory Thursday in its multi-state court fights over marketing of the antipsychotic drug Risperdal.Pennsylvania’s Commonwealth Court upheld the decisions of two Philadelphia Common Pleas Court judges, who collectively, in effect, dismissed a state-sponsored suit alleging J&J’s Janssen subsidiary inappropriately profited from sales through the taxpayer-funded Medicaid program. "We are very pleased with the Pennsylvania Commonwealth Court’s unanimous decision that the trial judge was correct in granting our motion for non-suit, which effectively dismissed the case filed against the company in 2007," Janssen said in a statement.

State officials did not respond to requests for comment, so its unclear if they will appeal. Rispderal is a approved by the U.S. Food and Drug Administration to treat schizophrenia and bipolar mania, but other states won big-money court fights over allegations that Janssen paid kickbacks to officials or marketed the drug for other ailments, sometimes for use in children. Medicaid is a state-federal health-care program for low-income citizens.

J&J agreed to pay $158 million to stop a trial in Texas. Though appeals are pending, it lost in South Carolina ($327 million), Louisiana ($258 million) and Arkansas ($1.2 billion). The company is negotiating with the federal government and reports suggest it might pay as much as $2.2 billion. Though concepts might transcend state lines, evidence does not always make it across. But in Pennsylvania, the Commonwealth Court essentially agreed with J&J attorney Edward Posner of Drinker Biddle who argued on May 16 in the Philadelphia hearing that the commonwealth had shown “a complete and total failure” to prove its case.

Among the J&J suits, this one is the hardest one for me to understand. Pennsylvania is where whistle-blower Allen Jones worked when he discovered the improper diversion of funds by J&J to bring Texas’ Mental Health Director, Dr. Stephen Shon, to PA to hawk his TMAP program. That was the beginning of the unraveling of J&J’s scheme to induce state government systems to preferentially use their drug [Risperdal]. When Jones was fired for investigating, he successfully sued in Psennsylvania and then filed his whistle-blower suit in Texas against J&J which was settled in January for $158 M – setting off a cascade of suits in other States with escalating awards. The Pennsylvania suit was thrown out after a partial trial in 2010, and now has not been successful on the appeal of that dismissal. In spite of large settlements in South Carolina, Louisiana, and Arkansas [all of which are being appealed], the only case they’ve actually paid on is in Texas where they settled during the trial in the face of damning testimony from medical experts – though a large $2.2 B Federal settlement looms in the near future. Having heard the evidence in the Texas Trial, it’s hard to imagine that they were behaving any better in Pennsylvania. The only thing I can figure is that Jones’ discovery came early and they hadn’t yet gotten their scam going…
    July 29, 2012 | 7:09 PM


    I hope the Pennsylvania attorney general is looking at the other state settlements, salivating, and thinking of ways to bring this suit again.

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