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J&J CEO Should Be Forced to Testify, Teen’s Lawyers Say

Johnson & Johnson (JNJ)’s top executive should be forced to testify about claims that the company illegally marketed the antipsychotic drug Risperdal, which allegedly caused boys to grow breasts, lawyers for a teenager suing the drugmaker said in a court filing.

Alex Gorsky, J&J’s chief executive officer, once ran the unit responsible for making and selling Risperdal and has intimate knowledge of the company’s illegal marketing efforts targeting doctors who treat troubled youths, lawyers for a 15- year-old Texas boy said in a filing in a Philadelphia state court. J&J attorneys contend Gorsky will be out of the country when jurors begin hearing evidence in the trial of the boy’s claims Sept. 24.

“There is no question that Mr. Gorsky had significant, direct and important involvement in the conduct that gave rise to this litigation,” Steve Sheller and Brian McCormick, two Philadelphia-based lawyers for the teen, said in a filing yesterday.

The suit is one of more than 400 against New Brunswick, New Jersey-based J&J and its Janssen unit alleging personal injuries caused by Risperdal, the company said in a regulatory filing last month. Last week, J&J settled the first case slated for trial over the breast-development claims.

Teresa Mueller, a J&J spokeswoman, said the company contends that Gorsky already has testified about his handling of Risperdal marketing strategies in connection with the teen’s case.

“Mr. Gorsky testified by deposition for seven hours in regard to this matter,” she said in a telephone interview.

Witness Stand

The CEO won’t be able to completely avoid testifying in the litigation over boys’ claims that Risperdal caused them to develop breasts, said Erik Gordon, a University of Michigan business professor who follows the pharmaceutical industry.

“Sooner or later, Mr. Gorsky is going to be compelled to take the witness stand in front of jurors and be cross- examined” on his oversight of the company’s Risperdal marketing practices, Gordon said in an e-mail. “That is, unless he orders JNJ to settle these cases to avoid that risk.”

Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. It generated $3.4 billion in sales in 2008, or 5.4 percent of J&J’s revenue, according to company filings. Sales of the drug fell to $527 million in 2010, according to earnings reports.

Government Investigations

J&J and Janssen’s marketing of Risperdal has also been the target of government investigations and litigation. Federal prosecutors have been investigating Risperdal sales practices since 2004, including allegations that the company marketed the drug for unapproved uses, J&J executives said in a regulatory filing.

J&J officials have reached an agreement with the U.S. Justice Department to pay as much as $2.2 billion to resolve probes of its sales of drugs, including Risperdal, according to people familiar with the matter, Bloomberg News reported earlier this year.

The company last month agreed to pay $181 million to resolve claims by 36 states that it improperly marketed and advertised Risperdal and Invega, another antipsychotic.

Gorsky was named in February to take over as J&J’s CEO, succeeding Bill Weldon. He had been vice president of sales and later president of J&J’s Janssen unit. Gorsky started as a member of J&J’s sales force in 1988, according to the filing.

Expanded Sales

The executive has touted his work with Risperdal on his resume, noting that he expanded the drug’s U.S. sales by $300 million, the teen’s lawyers said in the filing.

Risperdal’s sales climb was tied to J&J’s illegal marketing of the drug for so-called “off-label” sales, according to the filing.

Under U.S. law, a doctor can prescribe a medicine for any condition, as long as it’s licensed by the FDA and proven safe and effective against at least one ailment. Drug companies, however, aren’t allowed to promote a drug for uses other than those approved by the FDA.

Gorsky oversaw a sales force that was trained to market the drug to pediatricians for uses in children that hadn’t been approved by regulators at the time, the teen’s lawyers said in the filing.

A 2001 J&J business plan stated that one of the company’s goals was to “grow awareness of Risperdal use in child/adolescent market via medical education,” the lawyers said in the filing.

Free Trips

“Janssen promoted Risperdal off-label by, among other things, offering free trips to hotels and vacation locations, free meals, free samples of Risperdal and other perks to further advance the educational information it was providing doctors,” the attorneys said in the filing.

They added that an internal Janssen e-mail from February 2003 said “these issues (off-label prescriptions to children) leave Alex Gorsky awake at night.”

Since Gorsky was “in the middle” of the Risperdal marketing strategy, his testimony is crucial to making out a case over the drug’s illegal sales, the lawyers added.

The case is In re Risperdal Litigation, March Term 2010, No. 296, AB, a minor v. Janssen Pharmaceuticals, Jan. Term 2010, No. 00649, Philadelphia Court of Common Pleas (Philadelphia).

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

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

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