J&J to pay $1bn to settle Risperdal probes

 Johnson and Johnson may have to pay more than $1bn to the US government and various individual states to resolve civil investigations into the marketing and sales of its antipsychotic treatment Risperdal.

More than 12 different states are taking legal action after allegations that J&J marketed the treatment for a series of unapproved indications, according to people familiar with the matter.

J&J say it has been in negotiations to settle the investigations and has reserved funds to resolve the US government’s claims and cover additional criminal penalties.

The world’s largest health product company reached an undisclosed agreement last week with the attorney in Philadelphia, sources say, and may have to pay the state of Texas more than a billion dollars to resolve a similar case. Previously, a jury in Louisiana awarded the state $257.7m in 2010 and a judge in South Carolina ordered the company to pay the state $327m last year.

Risperdal, once J&J’s best-selling product, was approved by the FDA in 1993 for psychotic disorders, including schizophrenia. It generated global sales between 2003 and 2010 of $24.2bn.

But the US government has been investigating the sales of Risperdal since 2004 after allegations that J&J’s Janssen unit attempted to sell the treatment for the unlicensed indications: bipolar disorder, dementia, mood and anxiety disorders and other unapproved uses, according to documents used in the lawsuit by the state of Louisiana. Hundreds of salespeople from Janssen sold the drug incorrectly to doctors, nursing homes, Veteran’s Administration facilities and jails, according to the document.

In 1994, 1999 and 2004, The FDA ordered Janssen to stop making false and misleading marketing claims about the treatment’s superiority and told J&J in 1999 that the marketing material for geriatric patients overstated Risperdal’s benefits and minimised risks.

Risperdal is an atypical antipsychotic, such as Lilly’s Zyprexa and AstraZeneca’s Seroquel. Previously, Lilly and AZ, plus two other competitors, have paid $2.7 billion to resolve similar US government marketing claims.