A judge in South Carolina has ordered a Johnson & Johnson subsidiary to pay the State of South Carolina $327 million for deceptive marketing of an antipsychotic drug. Judge Roger Couch ordered Janssen Pharmaceutica, Inc. to make the payment for violations of the South Carolina Unfair Trade Practices Act. A jury in March found that the subsidiary of the New Brunswick, N.J.-based drug manufacturer violated the law by sending misleading letters to about 7,200 doctors in South Carolina. The company downplayed links between diabetes and the schizophrenia drug Risperdal and improperly claimed the drug was safer than competing medications.
The amount was the largest drug marketing award to date in South Carolina history and the largest penalty ever levied for violations of the South Carolina Unfair Trade Practices Act. The blockbuster antipsychotic, which generated $1.5 billion in sales last year, lost patent protection in 2008. South Carolina Unfair Trade Practices Act violations carry potential penalties of up to $5,000 apiece, meaning the company faced possible consequences of more than $3.1 billion, considering the 620,000 Risperdal prescriptions written for people on Medicaid and the state health plan alone. Opting not to consider the number of prescriptions in his equation, Judge Couch assessed a $300 penalty per sample box of the drug that was distributed and a $4,000 penalty per publication of the “Dear Doctor” letter, for a total penalty of more than $327 million. The judge wrote in his order.
There is absolutely no doubt in my mind that the desire to protect market share overshadowed the good judgment of those in control at Janssen.
The jury found that the company also made tens of thousands of drug marketing-related visits that minimized Risperdal’s link to diabetes, improperly claimed the drug was safer than other competing medications and enclosed misleading information inside drug packages. In his order, Judge Couch wrote that Janssen knew that Risperdal was associated with health problems, but intentionally hid those studies. In his order, the judge wrote:
The Company systematically set about in a concerted effort to conceal that information and to manipulate the information available to the public for the purpose of protecting or improving its market share.
As you may recall, South Carolina reached a settlement with Pfizer Inc. for $11 million over the company’s disputed sales tactics for certain drugs. That was about double the amount the state would have gotten under a multistate settlement agreement. In 2009, the state reached a $45 million settlement with Eli Lilly & Co. over the drug maker’s marketing of an anti-psychotic drug. According to the drug maker, that was its largest settlement with a single state over Zyprexa.
South Carolina’s case over Risperdal is the fourth to go to court nationally. A Pennsylvania case was dismissed in June, and a case in West Virginia was dropped in December. Janssen has appealed a Louisiana verdict ordering the company to pay nearly $258 million for misrepresenting Risperdal’s links to diabetes in that state. In May, Johnson & Johnson stated in a quarterly financial filing that it had set aside a reserve related to a federal criminal investigation of its sales and marketing practices for Risperdal.
Source: Associated Press
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