Improper Marketing of Medicine

J&J's Marketing of Risperdal Violated Law, Arkansas Jury rules

Johnson & Johnson (JNJ) officials misled Arkansas doctors and patients about the risks of the antipsychotic drug Risperdal, and the company’s marketing campaign violated consumer-protection laws, a jury ruled.


Jurors in state court in Little Rock, Arkansas, deliberated about three hours yesterday before finding J&J and its Janssen unit engaged in “false or deceptive acts” by sending a 2003 letter touting Risperdal as safer than competing drugs to more than 6,000 doctors across the state. The state is seeking more than $1.25 billion in penalties over the Risperdal marketing campaign, and a judge will decide later whether to fine J&J.

It’s the third jury verdict against J&J, the second-biggest maker of health products, in cases where states alleged the drugmaker hid Risperdal’s risks and tricked Medicaid regulators into paying more than they should have for the medicine. Louisiana and South Carolina juries also found the company’s Risperdal marketing violated consumer-protection laws.

“Three losses in a row means the company needs to become more realistic about its exposure and come up with an exit strategy in the form a settlement,” Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia, said in a phone interview.

Teresa Mueller, a spokeswoman for J&J’s Janssen unit, said the drugmaker was disappointed with the Arkansas jury’s ruling.

“It is our position that an individual state should not penalize a pharmaceutical company for using an FDA-approved package insert or decide for itself whether a company complies with FDA rules,” Mueller said in an e-mailed statement.

‘Lied To Patients’ Arkansas Attorney General Dustin McDaniel said in an e- mailed statement that he filed the suit because he believed Arkansas residents deserved to be protected from “fraud and deceptive practices.”

He said that jurors found “Johnson & Johnson and Janssen Pharmaceuticals lied to patients and doctors because they cared more about profits than people.”

Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. The drug generated $3.4 billion in sales in 2008, or 5.4 percent of New Brunswick, New Jersey-based J&J’s revenue, according to company filings. Sales of the drug fell to $527 million in 2010, according to earnings reports.

Safer, Better Along with contending that J&J and Janssen defrauded the Medicaid program by failing to properly outline the antipsychotic medicine’s risks, Arkansas officials alleged J&J officials deceptively marketed the drug as safer and better than competing medicines.

The state also argued the companies marketed the drug for “unapproved uses, including various symptoms in children and the elderly” after being warned by federal authorities to halt such sales.

The U.S. has been investigating Risperdal sales practices since 2004, including allegations that the company marketed the drug for unapproved uses, J&J executives said in a U.S. Securities and Exchange Commission filing last year.

The U.S. Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys general, people familiar with the settlement talks said this month.

Side Effects Arkansas officials asked jurors to find J&J’s Risperdal marketing campaign violated the state’s deceptive-trade practices law by making false and deceptive statements about the drug in the letter to doctors.

They also argued J&J and Janssen executives made false statements about the drug’s diabetes risks and other side effects in its warning label

The state will now ask Judge Tim Fox to fine J&J at least $5,000 for each prescription affected by the Risperdal marketing campaign. Arkansas said at least 250,000 prescriptions may have resulted from illegal marketing. That would amount to a fine of at least $1.25 billion.

The state said it also will seek damages over the misleading statements in the so-called “Dear Doctor” marketing letter the company sent to Arkansas doctors in 2003.

Arkansas officials also will also seek penalties for more than 19,000 sales calls in which J&J representatives allegedly used the letter or made other deceptive statements about the drug.

Public Funds Fox said he’d hear arguments today about the state’s requests for penalties, but didn’t say whether he’d issue his ruling at that time. “Let’s get this matter resolved,” he told lawyers for both sides after the jury verdict.

J&J and Janssen have been sued by 11 states seeking reimbursement for Medicaid or other public funds paid on Risperdal prescriptions. The lawsuits allege that J&J promoted the drug for dementia, mood and anxiety disorders and other unapproved uses, or downplayed risks.

In June 2010, a judge threw out Pennsylvania’s suit over the Risperdal marketing campaign in the middle of a trial. An appeal of that ruling is set to be heard next month.

Four months later, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials for making misleading claims about the drug’s safety. J&J has appealed.

In June 2011 a South Carolina judge ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. The company has appealed that ruling. J&J ended the most recent trial in Texas with a $158 million settlement in January.

The case is State of Arkansas v. Ortho-McNeil-Janssen Pharmaceuticals Inc., CV07-15345, Pulaski County Circuit Court (Little Rock) Arkansas.

Source : Bloomberg
Link to Source


Abbott Laboratories sets aside 1.5 Billion USD for a potential off-label marketing settlement


Abbott Laboratories ($ABT) has set aside $1.5 billion for a potential off-label marketing settlement with the U.S. Justice Department. Amid all the excitement about Abbott Laboratories' impending split into two companies, the legal charge hasn't attracted much attention. But if it does amount to $1.5 billion, it would rank as the second-biggest off-label settlement in history, outranked only by Pfizer's ($PFE) $2.3 billion deal.

The potential deal would resolve a longstanding investigation into Abbott's Depakote promotions and wrap up negotiations that have been going on at least since the spring. The Justice Department disclosed in court documents this June it was in active talks with Abbott to wrap up the Depakote probe.

Whistleblower lawsuits joined by the feds allege Abbott pushed the epilepsy drug, which is also approved for bipolar mania and migraine prevention, for a variety of unapproved uses. The company touted Depakote as a treatment for autism, sexual compulsions, agitated and aggressive dementia patients, and other conditions, the whistleblowers claim. The unapproved uses were promoted in a variety of U.S. healthcare settings, including long-term care and assisted-living facilities.

Although off-label marketing settlements have become commonplace in the drug industry, recent deals have been comparatively small. Johnson & Johnson ($JNJ) recently agreed to pay $81 million to wrap up a Risperdal marketing probe. But a series of large settlements came down in 2008, 2009 and early 2010, including Pfizer's $2.3 billion settlement of claims that it promoted Bextra and several other drugs for unapproved uses. Eli Lilly's ($LLY) $1.4 billion Zyprexa settlement currently stands as the second-biggest, with Allergan's ($AGN) $600 million Botox settlement in third place and AstraZeneca's ($AZN) $520 million Seroquel settlement in fourth.

Source : FiercePharma
Link to Source


Jury To Hear $1Bln. Lawsuit Against J&J Unit

A jury is set to hear claims against Janssen L.P., an unit of healthcare major Johnson & Johnson (JNJ: News ), on charges that the drugmaker used false marketing tactics to persuade the state's Medicaid officials to spend millions on its schizophrenia drug Risperdal. The suit, brought by the State of Texas and plaintiff Allen Jones, is currently set for June 21.

The company's total exposure in the anticipated jury trial, currently exceeds $1 billion in damages and other liabilities.

The lawsuit dates back to 2004, following evidence uncovered by Allen Jones during his work as an investigator with the Pennsylvania Inspector General's Office. The suit alleges Janssen to have misled Medicaid officials to give preference to Risperdal over other companies' medications, even though there wasn't any difference in the drug's efficacy. Risperdal was also exorbitantly priced compared to competitors, the complaint says.

The suit also accuses Janssen of having recommended the usage of the antipsychotic drug on children, even though it was only approved to treat adult schizophrenic patients.

The ground for the hearing of the claims follows a ruling late Thursday by a Texas District Court judge that favored the process, following summary judgment motions filed by the State of Texas and Janssen.

In the order, the court ruled against Janssen on two motions that would have closed the case, while the state of Texas had three summary judgment motions in its favor.

New Jersey-based Janssen focuses on mental health and offers prescription medications for the treatment of schizophrenia, autistic disorder, among others.

Schizophrenia affects 1 in 100 Americans, and is often characterized by inability to distinguish reality, think logically and behave normally in social settings. The market for the disorder is huge. In fiscal 2010, worldwide sales of Risperdal/Risperidone was $527 million, sharply down by 41.4 percent from last year. Meanwhile, the company's injection therapy Risperdal Consta saw a 5.3 percent climb in sales at $1.5 billion.

Johnson & Johnson has been facing product recalls and manufacturing shutdowns, which reduced sales by about $900 million last year as the company recalled 40 consumer products - mainly related to over-the-counter childcare medicines and Tylenol pain pills.

JNJ closed Friday's regular trade at $61.06, up $0.01 or 0.02%, on a volume of 11.4 million shares on the NYSE.

Source : RTT News (March 2011)
Link to Source


J&J in court over mis-marketing 'dangerous' antipsychotic drug

The state of Arkansas is taking legal proceedings against a subsidiary of 'big pharma' company Johnson and Johnson over the marketing of an antipsychotic drug. The state claims that the drug's side effects were suppressed. A subsidiary company of drugs giant Johnson and Johnson, called Janssen Pharmaceuticals Inc., allegedly improperly marketed an antipsychotic drug and misled doctors about the potential side effects of the medicine, according to a lawyer representing the state of Arkansas. According to ABC News, the state of Arkansas is seeking the drugs company to be fined for each of the 250,000 Risperdal prescriptions issued to the state's Medicaid publicly. If the state is successful the court's award could range from $1.25 billion to $2.5 billion. All money would go into the Medicaid fund. The side effects in question relate to diabetes and hormonal imbalance. The action is being taken under violated Arkansas' Medicaid Fraud False Claims Act. The state claims that not only did the drugs company not publicise the side effects in its marketing information, it also misled doctors in a letter about the drug's risks. Evidence from medical practitioners in Arkansas indicates that the drug caused deaths among elderly users and breast growth and lactation in young boys. Bloomberg quotes the attorney for Arkansas saying "By the time this case is over, we will prove to you that Janssen lied about Risperdal’s dangers just to make money." Janssen, through their legal team, are refuting both claims. James Simpson, a lawyer for Janssen said "The state will not present any evidence that a single person was injured while taking Risperdal,” Simpson said in his opening statement. “There will not be any evidence that the state of Arkansas lost a penny in paying for Risperdal for thousands of Arkansas citizens who needed the drug." However, as PhillyPharma has reported, earlier in March 2012 a Texas judge Tuesday approved a $158 million settlement between Johnson & Johnson and the state of Texas over allegations that J&J's Janssen subsidiary illegally promoted Risperdal through the Medicaid program. Risperdal was introduced in 1994 as a "second-generation" antipsychotic drug and was a successful revenue generating product for Janssen. The drug is is used to treat schizophrenia, bipolar disorder and irritability in autism patients.

Source : Digital Journal
Link to Source


Government nixes tentative $1 billion settlement with J&J: WSJ

Federal prosecutors in Washington, D.C. have nixed a tentative $1 billion settlement with Johnson & Johnson, holding out for a bigger settlement with the drugmaker for alleged improper marketing of its Risperdal schizophrenia drug, the Wall Street Journal said.

The report, citing sources familiar with the situation, said Department of Justice prosecutors in Washington rejected a proposed settlement worked out about two months ago between J&J and federal prosecutors in Philadelphia, and that the deal must now be renegotiated.

Officials in the Justice Department's criminal division could not be reached immediately for comment. J&J declined to comment.

The Department of Justice for years has been investigating the diversified healthcare company for alleged marketing of the anti-psychotic drug for unapproved uses, including for nursing home residents.

Individual states are also pressing similar allegations against J&J. The company in January said it will pay $158 million to settle a Texas lawsuit that accused it of improperly selling the drug to state residents on the Medicaid health program for the poor, including children.

That settlement fully resolved claims in Texas, J&J said, but does not affect other ongoing state or federal Risperdal litigation.

Source : Reuters
Link to Source

Irish Drug Maker Settles Charges of Improper Marketing
By DUFF WILSON Published: December 15, 2010

The Irish pharmaceutical company Elan has agreed to pay $203.5 million to resolve criminal and civil complaints that it improperly marketed the antiseizure medicine Zonegran for weight loss and mood stabilization, the Justice Department said on Wednesday.

Elan had disclosed in July that it was setting aside $206.3 million to resolve the investigation. The payment included a $97 million criminal fine.

The Japanese drug maker Eisai also agreed to pay $11 million to resolve a civil case for off-label marketing of Zonegran after it bought rights to the drug from Elan in 2004, federal prosecutors said. The agreement with Eisai in June was revealed Wednesday when the Elan case was partly unsealed.

The cases rose from a 2004 whistle-blower filing by Dr. Lee R. Chartock, a Massachusetts psychiatrist who said he had been courted by Elan, sent to a conference and asked to prescribe the drug for weight loss. Dr. Chartock will receive more than $10 million from the civil payment as a reward to encourage people to report illegal activity, the government said.

Approved drugs can be used by doctors for any purpose they see fit, but it is illegal for companies to market the drugs for purposes other than the ones approved by the Food and Drug Administration.

Robert M. Thomas Jr., a Boston lawyer and co-counsel for Dr. Chartock, said the drug industry had tried to ignore marketing abuses. “Even companies that are serious about compliance usually still have sales forces that are compensated based on the volume of drugs sold,” he said in an interview Wednesday. “It doesn’t take long for salespeople and their supervisors to figure out creative ways to hit higher numbers. The problem is those are achieved by off-label marketing.”

Elan and Eisai are the latest in a string of drug companies over the last five years to settle cases involving what federal prosecutors contend are off-label marketing violations of the federal False Claims Act, which bars companies from causing improper billings to government programs, like Medicare and Medicaid.

Elan Pharmaceuticals, a United States subsidiary of Elan, is pleading guilty to a misdemeanor charge of misbranding in violation of the federal Food, Drug and Cosmetics Act. There was no criminal case against Eisai.

John B. Moriarty Jr., senior vice president and general counsel of Elan, said the company was pleased to reach the agreement and was committed to high ethical and legal standards.

Source : New York Times
Link to Source