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Massive Settlement Closes Case Over Improperly Marketed Drugs

Johnson & Johnson reached a settlement deal with 36 states, ending a case alleging that it improperly marketed Risperdal and Invega for unapproved uses. The $181 million settlement is the largest agreement to come from a multistate consumer protection pharmaceutical case. Settlements like this demonstrate a lack of tolerance for marketing practices that risk dangerous medication or prescription errors.

In 1993, the FDA approved Risperdal for psychotic disorders only. Because the market for anti-psychotic drugs is relatively small, Johnson & Johnson attempted to market and advertise the drug for other conditions like dementia, bipolar disorder, and anxiety disorders.

In its suit, New York also alleged that Johnson & Johnson marketed Risperdal to children before determining whether it was safe or effective. The states alleged a number of inappropriate and improper marketing practices, including sham consulting programs and kickback schemes.

Risperdal has embroiled Johnson & Johnson in a legal saga. The company is apparently also in the process of settling a number of False Claims Act lawsuits with the federal government, purportedly agreeing to pay $2.2 billion. Johnson & Johnson also pleaded guilty to a misdemeanor criminal charge in 2011.

Private plaintifffs also brought a number of Risperdal claims against Johnson & Johnson. The awards in those cases reach well into the billions of dollars. The company is appealing some of the cases.

Despite the large size of this settlement, Johnson & Johnson did not admit that it did anything wrong. The company claimed in a statement that it chose to settle the claims to resolve the lawsuits and allow it to move on with its business.

Source: Bloomberg, "J&J Will Pay $181 Million to Settle Risperdal Ad Claims," David Voreacos and Margaret Cronin Fisk, Aug. 30, 2012

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