Johnson & Johnson Risperdal Trial; $1 Billion Claim

Earlier this week, the lawsuit involving Johnson & Johnson’s antipsychotic drug, Risperdal, got underway in Austin, Texas, and has been described by lawyers as the biggest lawsuit in Texas since the tobacco litigation in the 1990s. The Texas case is separate from a reported $1 billion settlement reached two weeks ago between Johnson & Johnson (the world’s largest health-care products company) and other states over the marketing of Risperdal.

Risperdal is used to treat schizophrenia and bipolar disorder.

In their opening statements, attorneys accused Johnson & Johnson (and some of their subsidiaries) of committing fraud against Medicaid, the federal health care program for the needy, by making false or misleading statements about the safety of Risperdal, as well as the costs and effectiveness compared to other drugs in the 1990s.

Johnson & Johnson’s Janssen unit marketed its antipsychotic Risperdal to children and adolescents, despite warnings by the U.S. Food and Drug Administration not to do so.  Janssen’s marketing to children began after the drug’s introduction in 1994, up until the FDA’s first approval for pediatric uses in 2006, as told by an expert witness for the state.  He explained the company documents and FDA letters as the attorneys for the state of Texas try to show Janssen repeatedly disregarded and ignored agency admonitions to not market Risperdal beyond its initial use for psychotic disorders including schizophrenia. He said, “Safety and effectiveness in children have not been established.”

Texas is asking the jury to force Johnson & Johnson to pay back $579 million paid to fill prescriptions for Risperdal, with $500 million more in penalties.  The federal government would collect half of any money awarded by the jury. It has been said that Johnson & Johnson made $34 billion in Risperdal sales over 17 years.

Risperdal was among the antipsychotic drugs introduced in the 1990s. It was initially approved for adults with schizophrenia, and soon became widely used in Texas mental hospitals and prisons for “off-label” uses, including youths in the state’s foster care system. Texas has one of the largest Medicaid populations.

Influential decision makers were what supported Janssen’s promotional efforts; including state employees, faculty from University of Texas, mental health advocates, as well as medical directors, who received consulting fees, being wined and dined, travel accommodations, research funding and honoraria, plus $229 per prescription, according to the lawsuit.

Janssen strongly denies misrepresenting Risperdal, and rejects allegations that its marketing efforts inflated the states’ spending on Risperdal. Even though the state claims Risperdal was no more effective and that the risks were worse than its competitors and that it was 45 times more expensive.

Janssen determined that the market for Risperdal in 1993 was the 1% of adults with diagnosed schizophrenia (which was a $1 billion market). So, the company created a new market, with the perception that Risperdal was a breakthrough for expanded “off-label” treatments. The revenue generated by the sale of Risperdal jumped to $34 billion between 1997 and 2010.

A jury weighing only the claim that the company downplayed the drug’s awarded Louisiana $257.7 million in 2010. A judge in South Carolina last year ordered Johnson & Johnson to pay $327 million over Risperdal. The Texas suit may result in the largest-ever false-claims verdict.  They stand to lose more than a billion dollars, and may face litigation from stockholders for failing to settle this case.

However large this verdict, it should come as a warning to the drug manufacturers.  They bribed doctors with perks, essentially giving them commission per prescription, all the while knowing these drugs would be harmful to those that took them. They conveniently left that part out when informing the doctors about this medication. Is this justice?

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