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J&J’s Risperdal Sales May Have Violated Pact, Witness Said

A Johnson & Johnson unit’s marketing of its Risperdal antipsychotic drug to doctors treating mentally ill children may have violated the drugmaker’s agreement with Texas, a state official testified.

A push by J&J’s Janssen unit to increase Risperdal prescriptions for children and adolescents before 2006 may have broken the drugmaker’s promises to “comply with all state and federal laws” in exchange for having the drug covered by the Texas Medicaid program, Billy Milwee, the state Medicaid director, told a jury today. The U.S. Food and Drug Administration didn’t approve Risperdal for any pediatric use until 2006.

If the company pushed Risperdal for unapproved uses, “it would be operating outside state and federal law,” Milwee testified in the trial of the state’s lawsuit over Janssen’s marketing of the drug.

Texas contends New Brunswick, New Jersey-based J&J, the world’s largest health-care products company, defrauded the Medicaid program by promoting Risperdal for uses not approved by U.S. regulators, including for children with psychiatric disorders. The state joined a lawsuit filed by a whistle-blower, Allen Jones, a former Pennsylvania health-care fraud investigator.

Lawyers for Texas Attorney General Greg Abbott are asking jurors in state court in Austin, Texas, to order J&J and Janssen to pay at least $579 million in damages over the companies’ Risperdal marketing practices.

Company’s Promise

Milwee said Janssen officials promised to honor all applicable laws in 1994 when it first applied to have Risperdal prescriptions in the state covered by Medicare. It reiterated the promise seven more times over the next 13 years, he added.

Texas’s Medicaid agreement requires disclosure by drug companies if they violate state or federal laws, Milwee said. Janssen never made any such disclosure over the unapproved marketing of the drug to doctors who treat children suffering from mental illnesses, he added.

The state’s Medicaid program “would not have engaged as great a cost as it did” if Janssen officials hadn’t misled doctors and regulators about Risperdal’s superiority to other antipsychotics and avoided marketing the drug for unapproved uses, Milwee added.

The state contends it paid 45 times more for Risperdal than comparable drugs after accepting the company’s claims that it was superior to rival medications.

Still on List

Milwee acknowledged under cross-examination that Texas officials haven’t removed Risperdal from its list of drugs eligible to be covered by Medicaid.

John P. McDonald, one of Jansen’s lawyers, asked if it’s true that “a drug doesn’t have to be the safest or even the cheapest in its class” to be on the list. Milwee agreed those aren’t requirements.

Valerie Robinson, a child psychiatrist who serves on a state board that evaluates the performance of drugs on the Medicaid-approved list, testified she received “numerous visits” from a Janssen salesperson in the mid-1990s touting the benefits of Risperdal for her patients.

“At that time, there was no indication for its use with children,” Robinson, based in Lubbock, Texas, told jurors in a videotaped deposition.

Pumping Up Sales

Jurors also heard testimony from Tone Jones, a former Janssen executive, who said company officials pushed salespeople to step up visits to child psychologists in hopes of pumping up Risperdal sales.

The reason Janssen focused on children and adolescents as a source for more Risperdal prescriptions to broaden the market for the drug, said Jones, a former quarterback for Oklahoma State University who graduated in 1996.

Federal regulators had only approved the drug for use in adult schizophrenics and that amounted to about 1 percent of the U.S. population, Jones said.

A drug “can’t be a billion-dollar product in a 1 percent market,” he testified in a videotaped deposition.

The case is Texas v. Janssen LP, D-1GV-04-001288, District Court, Travis County, Texas (Austin).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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