1 Boring Old Man

J&J May Pay $2.2B To Settle Risperdal Probes
Pharmalot
by Ed Silverman
June 11, 2012

After lengthy on-and-off negotiations, Johnson & Johnson has agreed to pay as much as $2.2 billion to settle various federal government probes into the marketing of the Risperdal antipsychotic, as well as other medications, Bloomberg News reports… The accord, which would be the second-largest such settlement reached by a drugmaker behind the $2.3 billion paid by Pfizer, will also resolve charges that J&J illegally marketed the Natrecor heart medicine and the Invega antipsychotic, as well as a widely publicized whistleblower case in which J&J was accused of paying kicbacks to the Omnicare nursing home pharmacy to boost Risperdal prescribing. A deal may be announced this week.

A settlement would mark a turning point for J&J, which has suffered years of damaging publicity over numerous probes and lawsuits concerning Risperdal marketing. Specifically, the health care giant has faced repeated allegations that its Janssen unit downplayed or hid the risks of diabetes and weight gain associated with the drug from physicians and patients. The charges eventually encompassed newly annointed J&J ceo Alex Gorsky. In fact, a deal means that Gorsky would escape the embarrassment of being deposed by the feds, who sought to quiz him about his role in Risperdal marketing as part of their effort to pressure J&J to settle… “As vice president of marketing, and having previously worked closely with J&J’s Medical Development group [which was responsible for developing clinical trial data for Risperdal], he was in a position to know why J&J chose not to inform Omnicare [or members of Janssen’s own sales staff] that, in January 1999, the Food & Drug Administration had warned J&J that marketing Risperdal as safe and effective in the elderly would be false and misleading because the drug had not been adequately studied in that population,” the feds wrote in an attempt last spring to get him to sit still for questioning.

^{The move to depose Gorsky [back story] came shortly after an agreement in principle broke down over the amount that J&J was to have paid. The health care giant last year set aside an unspecified amount for a settlement. 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. The $2.2 billion deal, however, would not include lawsuits brought by attorneys general in three states where J&J has appealed or plans to appeal judgments over Risperdal marketing, Bloomberg writes. In April, an Arkansas judge fined the health care giant $1 billion, just three months after J&J agreed to settle a lawsuit brought by the Texas attorney general and just a few days of blistering courtroom testimony that placed its marketing practices in a harsh light…}

[UPDATE: “What we’re seeing now is the importance of state False Claims Act laws. The wins in Texas and Arkansas changed the terms of the settlement on the table at main Justice, effectively doubling the amount of money they required to ink a deal. Now, the question is what conduct is actually going to be covered, and how many states are going to join this settlement," says Patrick Burns of Taxpayers Against Fraud, a non-profit. "Action at the state level is changing things quickly, which is why most companies should be running, not walking, to the settlement table. For fraudsters, I think things are only going to get worse. We are going to see our first $3 billion pharmaceutical case this year, and I predict a $5 billion case within 18 months.”]