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Johnson & Johnson Might Pay $1.8 Billion for Risperdal Claims

Pharmaceutical giant Johnson & Johnson may have to pay over $1.8 billion to settle claims related to its marketing of its blockbuster antipsychotic drug Risperdal. The drug was once Johnson & Johnson’s best-selling drug, generating over $24 billion in 2003.

Risperdal was approved by the Food and Drug Administration to treat psychotic disorders, but the company sold the drug to treat other ailments which often resulted in significant patient harm. Many Risperdal users have since filed lawsuits regarding the dangerous pharmaceutical product’s off-label use and several states initiated civil litigation regarding the drug’s off-label marketing.

The Justice Department and several U.S. states reached a $1 billion settlement with the drugmaker back in December, but Texas opted not to join the settlement and obtained a $158 million settlement in a separate civil lawsuit. The success of Texas in obtaining a sizable settlement led some states to pressure the government into raising the collective civil settlement by $800 million.

“Considering how much money the state of Texas got, it makes sense for the DOJ to push back for a significantly higher number,” one analyst said. “Washington can do the math.”

Other state lawsuits against Johnson & Johnson went to trial, resulting in even bigger payouts. A Louisiana jury awarded the state over $257 million based on the company’s actions in downplaying the risks of Risperdal. A South Carolina judge ordered that the drugmaker pay that state $327 based on similar Risperdal claims.

Many of Johnson & Johnson’s competitors have also entered into settlements regarding the off-label marketing of similar drugs, called atypical antipsychotics. Eli Lilly & Co. paid over $1.7 billion to resolve claims regarding its atypical antipsychotics. Pfizer Inc. has paid over $300 million and AstraZeneca Plc paid $590 million to settle similar claims.

Source: Bloomberg News, “J&J’s Risperdal settlement swells to $1.8B,” March 12, 2012