Did J&J Plan to Break Rules?

Johnson & Johnson's (JNJ) Risperdal was, in some ways, a drugmaker's dream. At its peak in 2007, the antipsychosis medicine produced $4.5 billion in revenue. But it has also opened up a medicine cabinet full of legal woes. Lawsuits are now pending against J&J in 10 U.S. states for promoting Risperdal "off-label"—meaning for uses the Food & Drug Administration did not approve. And in January of this year, the U.S. Justice Dept. sued J&J in a federal court in Boston, claiming the company paid kickbacks to Omnicare (OCR), the largest U.S. pharmacy for nursing home patients, to buy and recommend Risperdal and other drugs.

Documents from a lawsuit by the state of Louisiana accusing J&J of off-label marketing shed fresh light on the company's long-standing desire to broaden the market for Risperdal beyond the ailments listed initially on the label—psychotic disorders linked to schizophrenia. J&J disclosed the documents from the suit, filed in the Opelousas district court in September 2004, after Bloomberg News asked the court to unseal them. The case is scheduled to go to trial in September.

As early as 1994, the filings show, the FDA ordered J&J's Janssen Pharmaceuticals unit, which developed Risperdal, to stop making false and misleading marketing claims about the drug's superiority to competing medicines. In 1999 the FDA warned J&J in a letter that its marketing materials for geriatric patients, including brochures, journal ads, and letters, overstated Risperdal's benefits while minimizing its risks. The letter said J&J misleadingly implied that Risperdal had been found effective for illnesses such as bipolar disorder and elderly psychosis. Months later J&J drew up a business plan that called for increasing Risperdal's market share in treatments for elderly dementia, aiming at $302 million in sales, the filings show.

"Egregious Examples"

Louisiana cited dozens of internal J&J files in its lawsuit claiming the company marketed Risperdal to the elderly and to children for unapproved, off-label uses. Professor Jerry Avorn of Harvard Medical School, who isn't involved in the case, says the papers add up to "one of the more egregious examples" of marketing drugs to vulnerable patients. Medical professionals know "that drug companies resort to unsavory practices to promote drugs," he says, but seeing the details of this campaign "is still pretty upsetting."

J&J, based in New Brunswick, N.J., denies engaging in off-label marketing and has not reserved money for a settlement. The company says it will fight the lawsuit, in which Louisiana seeks hundreds of millions of dollars in fines and reimbursement of public funds spent on Risperdal. Louisiana "does not cite any evidence that Janssen made misrepresentations or engaged in off-label promotion of Risperdal," J&J said on Nov. 30, 2009, in court papers asking a Louisiana state court judge to dismiss the case. In an e-mail, a Janssen spokesman told Bloomberg: "The Louisiana litigation should be decided on the body of evidence, including testimony, not the basis of excerpts from documents that could be selectively quoted."

U.S. laws give doctors a lot of leeway when it comes to prescription drugs. They can treat patients with any medicine as long as the FDA has deemed it safe and effective against at least one ailment. But it's illegal for drug companies to make false claims or to promote drugs off-label.

The court filings show Janssen sought to sell Risperdal for bipolar disorder, dementia, mood and anxiety disorders, and other unapproved uses. Janssen salespeople promoted the drug to doctors, nursing homes, Veterans Administration facilities, and jails, and they also gave materials to doctors about studies involving unapproved uses. Over time, the FDA did conclude that Risperdal was effective for several mental illnesses. In 2003, it approved Risperdal for bipolar disorder. Three years later the drug was cleared to treat symptoms related to autism in children and teens. Regulators also cleared it to treat bipolar children and teens in 2007. The drug was never approved for dementia.

Lawsuits tied to off-label marketing have proliferated in the past four years, and drugmakers have paid out some lush settlements. Last September, Pfizer (PFE) agreed to pay the U.S. government and various states $2.3 billion for off-label promotion of its Bextra painkiller and other drugs. For antipsychotics alone, off-label settlements against Pfizer, Eli Lilly (LLY), AstraZeneca (AZN), and Bristol-Myers Squibb (BMY) have mounted to more than $2.5 billion since 2006.

Resolutions reached in some of these cases do not bode well for J&J. Lilly's settlements with the U.S. government and more than 40 states for off-label promotion of its antipsychotic, Zyprexa, came to more than $1.6 billion over time. "It was this very conduct—marketing an atypical antipsychotic for dementia rather than for psychosis—that led to the $1 billion-plus settlement with Eli Lilly," says Patrick Burns of Taxpayers Against Fraud, a Washington organization that supports whistleblower suits.

A Marketer in the House?

In all, J&J made more than 5,000 pages of documents public. The filings show that Janssen executives felt a strong need to broaden their marketing efforts shortly after Risperdal won FDA approval. "Schizophrenia represents only 35% of [antipsychotic] prescriptions," Ivo Caers, a Janssen executive, wrote in a 1994 report included in court papers. "Aggressive expansion of Risperdal use in other indications is therefore mandatory."

Like other drugmakers, Janssen hired doctors to speak at continuing medical education, or CME, programs. But to drive sales, it armed them with slides extolling Risperdal's effectiveness. "The content of the Speakers Slide Kit is driven by marketing as they are promotional in nature," says a January 2003 e-mail sent by Jeni Bastean, a Janssen executive. At a 2003 meeting, another Janssen executive praised the use of coached questioners at programs, according to a transcript.

A doctor identified in the transcript as Randy told Janssen employees that he signed a letter agreeing he would talk only about permitted uses of Risperdal. But Randy had a way around this: "I always plant a shill, because if I get asked a question from the audience, I can then speak off-label." After this remark, Dr. Andrew Greenspan, an executive in Janssen's medical affairs department, said: "That's good practical advice."

CME meetings also aided Janssen's marketing of Risperdal as a geriatric drug, according to Lon Schneider, a psychiatry professor at the University of Southern California and a plaintiff's expert in the litigation. The common element to such meetings, Schneider wrote in his expert report, "was to promote the use of Risperdal and other Janssen products for elderly patients with dementia."

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