By Margaret Cronin Fisk and Jef Feeley – Aug 10, 2011 12:01 AM ET
Johnson & Johnson (JNJ) said it reached an agreement to settle a misdemeanor criminal charge related to marketing of its antipsychotic drug Risperdal.
The U.S. has been investigating its Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, J&J said in its quarterly filing yesterday. The Justice Department and the U.S. attorney in Philadelphia “are continuing to pursue both criminal and civil actions,” the company said.
“Discussions have been ongoing in an effort to resolve criminal penalties under the Food Drug and Cosmetic Act related to the promotion of Risperdal,” J&J said. “Certain issues remain open before a settlement can be finalized.”
The company said it is also in negotiations to settle civil investigations related to marketing of Risperdal and another drug, Invega. J&J, based in New Brunswick, New Jersey, said it wasn’t sure a settlement could be reached on those claims.
J&J said it has been notified by the U.S. government that the Justice Department will intervene or join multiple lawsuits filed by whistleblowers against the company’s Janssen Pharmaceuticals unit over Risperdal sale practices. The lawsuits, brought under the U.S. False Claims Act, were filed under seal and haven’t yet been made public.
States Sued
Terri Mueller, a company spokeswoman, didn’t immediately return a call seeking comment.
“The ultimate resolution of the above criminal and these civil matters is not expected to have a material adverse effect on the company’s financial position,” J&J officials said in yesterday’s filing.
Johnson & Johnson and the Janssen unit have been sued by 11 states seeking reimbursement for Medicaid or other public funds paid on Risperdal prescriptions, the company said. The lawsuits allege that the company promoted the drug for dementia, mood and anxiety disorders and other unapproved uses, or downplayed risks.
Last year, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials for making misleading claims about the antipsychotic’s safety. J&J officials said in yesterday’s filing that case is on appeal.
In June, a South Carolina judge ordered J&J officials to pay $327 million in penalties for deceptively marketing the medicine. J&J executives said in yesterday’s SEC filing that they’ve asked the judge to throw that verdict out.
Similar Litigation
“The attorneys general of approximately 40 other states have indicated a potential interest in pursuing similar litigation against” the Janssen unit, the company said. The statute of limitations on such actions has been put on hold while these states “pursue a coordinated civil investigation,” J&J said.
In May, company officials said in an SEC filing that they had reserved funds to resolve the government’s claims over Risperdal marketing. The company didn’t say how much had been set aside. The drugmaker said in yesterday’s regulatory filing it has added an unspecified amount to that reserve to cover criminal penalties.
The agreement in principle on the criminal charge is “pursuant to a single misdemeanor violation of the Food, Drug and Cosmetic Act,” the company said.
Artificial Joints
In April, in a separate action, J&J agreed to pay $70 million to resolve criminal and civil charges after admitting it bribed doctors in Europe and paid kickbacks in Iraq to win contracts and sell drugs and artificial joints. As part of a deferred prosecution agreement, J&J subsidiary DePuy was charged with conspiracy and violations of the Foreign Corrupt Practices Act.
In May 2010, J&J’s Ortho-McNeil Pharmaceutical LLC pleaded guilty in federal court in Boston to a misdemeanor charge of selling a misbranded drug, admitting it illegally marketing its Topamax epilepsy drug for other ailments. J&J paid $81 million to resolve criminal and civil cases.
To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@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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