Aug. 30 (Bloomberg) -- Johnson & Johnson will pay $181 million to resolve claims by 36 states that it improperly marketed and advertised the antipsychotic drugs Risperdal and Invega.
J&J and its Janssen unit settled claims that it promoted the drugs from 1998 through 2004 for uses not approved by the U.S. Food and Drug Administration. New York Attorney General Eric Schneiderman said today the accord is the largest multistate consumer protection-based pharmaceutical settlement.
“This landmark settlement holds the companies accountable for practices that put patients in danger, and serves as a warning to other pharmaceutical giants that they must play by one set of rules,” Schneiderman said in a statement.
J&J agreed it won’t promote the drugs for off-label uses or tout them falsely. The company said Aug. 2 that it has agreed in principal with the U.S. to settle three False Claims Act lawsuits. They involve Medicaid-related claims for Risperdal, Invega and the heart-failure drug Natrecor, as well as kickback allegations involving Omnicare Inc. J&J will pay as much as $2.2 billion, according to people familiar with the matter.
The company, based in New Brunswick, New Jersey, settled “to resolve the concerns of the attorneys general under state consumer protection laws and to avoid unnecessary expense and a prolonged legal process,” it said in a statement.
J&J didn’t admit wrongdoing or pay a fine or penalty.
“We have chosen this path to achieve a prompt and full resolution of these state claims and to ensure we continue to focus on our mission of providing medicines to meet the significant unmet needs of many people who suffer from mental illness,” Michael Yang, Janssen’s president, said in a statement.
The states separately filed lawsuits that made similar claims about how J&J made false and deceptive claims over Risperdal and Invega, promoted them for off-label uses, misused continuing medical education programs. The company promoted Risperdal for Alzheimer’s disease, dementia, depression and anxiety, when it wasn’t approved for such uses, states claimed.
“Janssen promoted Risperdal for use in children, even though Risperdal has not been established to be safe and effective in children,” according to New York’s complaint.
Using speaker programs on unapproved uses, sham consulting programs for physicians, and lucrative agreements with doctors who prescribed off-label, J&J “sought to enhance Risperdal’s off-label market penetration across a wide range of diagnoses and patient populations,” according to Florida’s complaint.
‘Sends a Message’
The agreement “sends a message to all pharmaceutical companies that these practices will not be tolerated,” Florida Attorney General Pam Bondi said in a statement.
Bondi said Janssen agreed to several steps over five years. They include having policies to ensure that financial incentives aren’t given to encourage off-label marketing; sales and marketing employees can’t develop the medical contents of responses to health-care providers; and it must describe the effectiveness and risks of drugs in a balanced manner.
The U.S. has been probing Risperdal sales practices since 2004. J&J disclosed in August 2011 that it reached an agreement to a misdemeanor criminal charge over Risperdal marketing.
The FDA approved Risperdal in 1993 for psychotic disorders including schizophrenia. That market is limited, and Janssen sought to sell Risperdal for bipolar disorder, dementia, mood and anxiety disorders and other unapproved uses, according to court filings. It was later approved for other uses.
Judges or juries in Arkansas, Louisiana and South Carolina have ordered J&J to pay a total of about $1.8 billion in damages and fines over Risperdal marketing campaigns that were found to have misled doctors and patients about the drug’s health risks and effectiveness. The company is appealing.
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.
In June 2011, a judge in South Carolina ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. Ten months earlier, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials over J&J’s Risperdal marketing campaign in the state. A Louisiana judge later ordered the drugmaker to pay an additional $73.3 million in attorneys’ fees and costs.
A Pennsylvania judge threw out the state’s case against J&J and Janssen in June 2010 during trial. The state of West Virginia dropped its Risperdal suit after a judge’s $3.95 million verdict in 2009 against J&J was reversed on appeal.
The settlement announced today includes the District of Columbia, as well as the 36 states.
The states are Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, Wisconsin and Wyoming.
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