Johnson & Johnson Agrees to Settle Five Rispersal Suits

Johnson & Johnson (JNJ) agreed to settle five lawsuits over claims that its antipsychotic drug Risperdal caused increased breast-tissue growth in boys.

Terms of the settlements weren’t disclosed at a hearing today in Philadelphia Court of Common Pleas.

“Our clients are very pleased,” Steve Sheller, a plaintiffs’ attorney, said after the settlement was announced. “I’ll never be truly satisfied because of what happened here with these kids. It’s a sad commentary on what goes on with prescription drugs and their use in children.”

The lawsuits are among more than 400 in which J&J and its Janssen unit were accused of personal injuries caused by Risperdal, the company said in an August regulatory filing. More than 100 involve claims that the drug caused young males to grow breasts, Sheller said.

The settlement covers cases that were planned for trial this year in Philadelphia, Janssen said in a statement e-mailed by spokeswoman Teresa Mueller.

The U.S. Food and Drug Administration gave its approval to Risperdal for psychotic disorders including schizophrenia in 1993. It was later approved for other uses. J&J has denied any wrongdoing.

“Since the early 1990s, Risperdal has improved the lives of countless people throughout the world who suffer from the devastating effects of serious mental illness,” according to the statement from Janssen.

‘Illegally Marketed’

Global sales of Risperdal peaked at $4.5 billion in 2007 and declined to $527 million in 2010 after the company lost patent protection.

J&J hid the fact that Risperdal could increase hormone levels that prompted breast development in males and trained salespeople to downplay the information in calls to doctors, Bob Hilliard, a plaintiff’s lawyer, told a jury on Sept. 24 in the first case to go to trial.

“A drug that was never meant for kids was illegally marketed to kids,” Hilliard said.

J&J’s lawyers countered that the boy’s breast development was normal for a teen going through puberty and Risperdal played no role in it.

Laura Smith, an attorney for J&J, told jurors the breast growth “was totally consistent with” the idea that the teen developed breasts as part of puberty. She said the company didn’t illegally market the drug.

U.S. Probe

The U.S. has been investigating Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, J&J said in a regulatory filing.

J&J officials 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 agreed to pay $181 million to resolve claims by 36 states that it improperly marketed and advertised Risperdal and Invega, another antipsychotic.

In April, a judge in Arkansas ordered the drugmaker to pay $1.2 billion in fines over Risperdal marketing. That verdict came three months after J&J decided to end a trial in Texas over the drug’s sales with a $158 million settlement. The Texas case included claims that the company marketed the drug for children while lacking approval by regulators for such use.

In June 2011, a judge in South Carolina ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. The company on Aug. 31 lost a bid to have a Louisiana appeals court throw out an award of almost $258 million that a jury ordered it to pay over Risperdal marketing in that state.

The Risperdal cases include A.B., a minor v. Janssen Pharmaceuticals, 00649, Philadelphia Court of Common Pleas, January Term 2010.

To contact the reporters on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net; Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net; Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

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

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