J&J Said to Face Demand to Lift Risperdal Settlement Offer by $800 Million
Bloomberg
By Margaret Cronin Fisk, Jef Feeley and David Voreacos
March 12, 2012
Johnson & Johnson faces a U.S. government demand to raise its offer by $800 million from an initial proposal to settle a federal civil investigation into marketing of the antipsychotic Risperdal, according to three people familiar with the matter. The Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by the U.S. and some states, the people said. The company raised its offer to settle the civil investigation to $1.3 billion by March 8, and negotiations on a final amount are continuing, one person said. The U.S. government has been investigating Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, Johnson &Johnson has said in Securities and Exchange Commission filings. The company said it has been in negotiations with the U.S. to settle the investigation. The demand came after the Justice Department and states decided that a $1 billion settlement that had been negotiated by the U.S. Attorney’s Office in Philadelphia in late December wasn’t adequate, according to the people, who weren’t authorized to speak on the matter.A $158 million settlement between J&J and the Texas attorney general during a trial over Risperdal marketing in that state increased the demands by other states and the Justice Department, one of the people said. Several states wanted more money because of the Texas agreement, the person said. The U.S. government has been investigating Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, J&J has said in Securities and Exchange Commission filings. The company said it has been in negotiations with the U.S. to settle the investigation…
The number of states that will join the final agreement remains in flux, one person said. Each state can decide whether to join the federal government’s settlement or pursue its own case. “Considering how much money the State of Texas got, it makes sense for the DOJ to push back for a significantly higher number,” said Patrick Burns of the advocacy group Taxpayers Against Fraud. “Washington can do the math.” The Wall Street Journal reported March 9 the Justice Department had rejected the $1 billion settlement negotiated by the U.S. Attorney’s Office in Philadelphia, citing unidentified sources…
J&J and Janssen have been sued by 12 states, including Texas, South Carolina and Louisiana, over Risperdal marketing. The attorneys general of the other states “have indicated a potential interest in pursuing similar litigation against” Janssen, J&J said in its quarterly SEC filing in November. J&J settled the claims by Texas for $158 million during trial in January. A jury in Louisiana, weighing claims that the company downplayed the drug’s risks, awarded that state $257.7 million in 2010. A South Carolina judge last year ordered J&J to pay $327 million over Risperdal sold in the state. Risperdal is a member of a class of drugs, known as atypical antipsychotics, that includes Indianapolis-based Eli Lilly & Co. Zyprexa and London-based AstraZeneca.
Lilly, AstraZeneca and two other J&J competitors making these drugs have paid $2.7 billion to resolve government marketing claims, particularly that the companies pushed the drugs for unapproved uses. Lilly paid more than $1.7 billion to resolve state and federal investigations over Zyprexa and AstraZeneca has paid almost $590 million. Pfizer Inc. paid $301 million for its drug Geodon.
The cascade of suits against J&J were beyond well deserved. I pulled out the references from the Texas Trial transcripts for this next part:
| STATE OF TEXAS and ALLEN JONES v. JANSSEN et al |
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| DATE | WITNESS | DESCRIPTION | |
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| State v. Janssen Vol 6 | |||
| 01/17/2012 | Tiffany Moake | Ms. Moake was a Sales Rep for Janssen from 2002-2004 in the San Antionio area. |
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| 01/17/2012 | Shane Scott | Mr. Scott was a Janssen employee and was Ms. Moake’s District Sales Manager. |
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| 01/17/2012 | Bruce Perry | Dr. Perry was an expert witness for the Plaintiffs – a Child Psychiatrist with Baylor Medical School. | |
| 01/17/2012 | Tone Jones | Mr. Jones was Janssen’s District Sales Manager for the Houston area. |
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| State v. Janssen Vol 7 | |||
| 01/18/2012 | Tone Jones | [continued] | |
A. Correct.
Q. Now, if one were seeking to expand the market for Risperdal, if its only use is in patients with schizophrenia – schizophrenia as a diagnosis, whether higher functioning or lower functioning, it’s still 1 percent, true?
Q. If all you’re talking about is getting a bigger chunk of the 1 percent, would you think that would constitute the fastest growing market for this drug?
A. Can’t be a $2 billion product and 1 percent marketing.
Of course it was another Jones, Allen Jones, whose intrinsic morality got this whole thing into the public domain in the first place – that and his capacity to continue swimming against the current for a decade. I actually felt sorry for many of the witnesses. They weren’t a bunch of fiends. They were just doing their jobs without stepping back a few steps and taking a hard look at the big picture they were part of. They were selling drugs to sick people that those patients didn’t need, and that made some of them sicker. They were ‘detailing’ doctors that their drugs were benign – the drugs were not benign. They were ‘detailing’ doctors that the drugs had an indication and an efficacy they didn’t have.
That’s overly optimistic wishful thinking, although I fervently wish it were not. There’s a new book out called Beautiful Souls by Eyal Press that more globally looks at why a few people act like Allen Jones, and what happens to them subsequently.
Your good doctors will predictably turn their backs on Allen Jones and his kind. From my n-1 experience, they will publicly state that they don’t even remember me except as a vague entity involved in the causative whistleblowing events. Whistleblowers are disappeared in every possible way – even as a memory of a person.
Yes the sales reps were just doing their job. Heck, the NAZI solders running concentration camps were just doing their jobs….
1 billion…1.8 billion…it matters not…no admission of guilt, no culpability for the massive damage done, or just getting off pleading to a frivolous misdemeanor….J&J & the rest of these corporations still walk away being rewarded quite handsomely for their unspeakable crimes….OH yes…should we forget the victims!!! You know those people that had their lives & health destroyed or experienced an untimely death…they won’t see a dime of this proposed settlement when it happens…
shall we be reminded that “we” (medicaid/medicare/health care premiums/tax payers) all get to pay for the “victims” care for the rest of their diminished lives..I would say that makes us all “victims” of the pharmaceutical industry crime wave…
shall we even try putting a dollar figure on that cost?
The investigation into the illegal marketing of Risperdal started in 2004; by then, the illegal marketing of Risperdal had been going on for a decade…my son has paid a steep price—continues to pay a steep price—As has been pointed out above, the primary victim’s care is an ongoing expense to the taxpayers. In my son’s case, his ‘medical care’ costs are more than our entire household budget. The psychiatric drugs alone cost $1,400. and require monthly lab work. The iatrogenic injuries he has are profound and medically neglected.
If these drugs were as useful and effective as they are claimed to be, they would sell themselves.
Absolutely!
I knew when I ended this post with “and helping a lot of doctors be the doctors they would like they think they are…” that I might be opening myself up to a criticism of terminal naivity or some kind of doctor defensiveness. It was one of those things you remove, add back, remove again, etc. I expect that I must be as conflicted about what I think about that as the next guy. Certainly if I had the experiences that some have had, I doubt I’d even be able to think it to be conflicted about it in the first place. And several commenters have called me to task on that point.
But I’ll not only take the point, I’ll amplify on it. I agree that there is no way to repay the victims of deliberate medical malfeasance. Mistakes or slip-ups are one thing, but deliberate breaches of clear medical ethics are quite another. While there’s no just reparation, I’d say that anyone who does that should lose the right to practice medicine – including the KOLs like Stephen Shon and the TMAP doctors at the top who knew what they were doing. It doesn’t help the victims, but it might prevent future victimization. Beyond that, it’s the right thing to do. Practicing medicine is a privilege, not a right. I would include people like those on Senator Grassley’s list for example. Doing no harm is a tough ethic to live up to, and like most, I’ve made my mistakes along the way – missed diagnoses, bad calls, lapsed attention. For those situations, it’s not a question of forgiveness, it’s a question of learning from them. In my case, no amount of reassurance about “being human” takes away the sting. But deliberately ignoring the ethic is yet another matter. My thinking is that you stopped being a physician the day you decided to do that, and deserve to have your decision turned into a reality.
What I was referring to was not the bad apples in the barrel. To hell with them. I was thinking about the rank and file psychiatrists who live in the current practice world that I personally think of as an almost impossible place to be. In spite of the fact that every force pushes psychiatrists and primary care physicians to over-prescribe psychoactive medications – pressure from referral sources, patients, third party carriers, drug reps, C.M.E., etc. I know there are plenty of people who don’t want to do that. I know that because they say it if you ask. They’re caught up in a quandry, and are just riding along “doing their jobs.” Many of them feel trapped too, seemingly resigned to their plight. And although they might want something different, they are defensive when challenged. What I’ve been thinking about lately is how to appeal to them in a way that leads to a change. No bright ideas yet, but I still think it’s worth thinking about.
On a vaguely, but insightful related basis, I ran across thisexchange of letters which I think captures the COI ethics argument brilliantly.
The money quote: The funded article is not in itself evil, but it is the beginning of evil, and it is an invitation to evil. I hope the invitation will not again be extended, and, if extended, I hope it will be declined.
Dr. Mickey writes: “They’re caught up in a quandry, and are just riding along “doing their jobs.†Many of them feel trapped too, seemingly resigned to their plight. And although they might want something different, they are defensive when challenged. What I’ve been thinking about lately is how to appeal to them in a way that leads to a change. No bright ideas yet, but I still think it’s worth thinking about.”
Yes! Offer an alternative. If there’s dissatisfaction with APA-style psychiatry, propose a different association with different values. Take over the American Academy of Clinical Psychiatrists, for example. Start with a politely dissident bloc and get like-minded members on the board of directors. Change the direction and publish relevant articles in the journals.
Don’t forget who made really big money from this sort of bad behavior: the top executives of J+J. It now looks like ex-drup rep BIll Weldon will be getting a golden parachute somewhere between $143.5 million and $197 million. As long as the people at the top can keep making this sort of money from the bad behavior of people lower down, they will keep pushing those people to “make their numbers,” no matter what.
See: http://hcrenewal.blogspot.com/2012/03/despite-recalls-legal-settlements-and.html
With all due respect, Dr Poses, physicians hold the power of the prescription pad. No one is holding their writing hands to a flame.
Where does the buck stop?
Thank you Mickey for writing this blog. I came back to this post to read the additional comments and am so glad I did. IMO you are spot on and I truly appreciate your brutal honesty about the difficulty involved with being a healer of souls…You’re a good egg.