US Department of Justice Declines J&J’s Risperdal Settlement

It has been reported that Johnson & Johnson’s bid to resolve alleged claims of illegal marketing of the antipsychotic blockbuster, Risperdal, which could cost the organisation about $1 billion, has been scuppered by the US Department of Justice.

A tentative deal between Johnson & Johnson and federal prosecutors in Philadelphia was reached a couple of months ago regarding the marketing practices for Risperdal and another schizophrenia drug, Invega, according to individuals familiar with the dispute.

The securities filing said Johnson & Johnson and federal prosecutors had reached an “agreement in principle” for the business to resolve possible criminal charges stemming from Risperdal marketing by pleading to a misdemeanor violation of the federal Food, Drug and Cosmetic Act.

However, prosecutors at the US Justice Department, who are required to sign off any deal, have rejected it within the past couple of weeks, according to the Wall Street Journal.  As a result, Johnson & Johnson and the federal prosecutors in Philadelphia, who had reached the tentative deal, must now go back to the drawing board.

The organisation has been under examination since 2004, specifically over claims Risperdal was safer than other antipsychotics, such as AstraZeneca’s Seroquel and Eli Lilly’s Zyprexa; the firm was also accused of downplaying the risk of diabetes associated with the treatment.  Under federal law, firms can market a drug only for the uses approved by the U.S. Food and Drug Administration (FDA), though doctors can prescribe drugs how they see fit.

The Wall Street Journal claims that the Department of Justice is looking for a settlement of roughly $1.4 billion, the sum Eli Lilly agreed to in 2009 to resolve allegations of improper promotion of Zyprexa.

The newspaper adds that Johnson & Johnson has battled against paying that amount. They quote Shelley Slade, a former Department of Justice healthcare fraud lawyer who now represents whistle-blowers suing drug makers, as saying that “for things to get so far down the road where there is what I would say is a handshake deal” is “highly unusual”.

Risperdal is a pill approved for treating schizophrenia and bipolar disorder.  It had been one of Johnson & Johnson’s top-selling treatments, generating over $2.2 billion in U.S. sales in 2007, before the U.S. patent expired.

In January this year, Johnson & Johnson agreed to pay $158 million to settle a lawsuit alleging that company marketing caused Texas’s Medicaid program to overpay for Risperdal.


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