An Arkansas judge fined Johnson & Johnson and a subsidiary more than $1.1 billion last month after a jury found that the companies downplayed and hid risks associated with taking the antipsychotic drug Risperdal. Circuit Judge Tim Fox determined that Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals Inc., committed nearly 240,000 violations of the state’s Medicaid fraud law – or one for each Risperdal prescription issued to state Medicaid patients over a 3 1/2-year period. Each violation carried a $5,000 fine, the state’s mandatory minimum amount, bringing the total to more than $1.1 billion.

Judge Fox issued an additional $11 million fine for more than 4,500 violations under the state’s deceptive practices act, but he rejected the state’s request to levy fines in excess of the $5,000 minimum for the Medicaid violations. Attorney General Dustin McDaniel said in a statement:

The ruling sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the (U.S. Food and Drug Administration), patients and doctors in order to defraud Arkansas taxpayers of our Medicaid dollars.

Arkansas was one of several states to sue over Risperdal. A South Carolina judge upheld a $327 million civil penalty against Johnson & Johnson and Janssen in December. Meanwhile, Texas reached a $158 million settlement with the companies in January. Jurors in the Arkansas case were told that Janssen could have seen a $200 million swing in its revenues if it issued alarming warnings that the drug could cause weight gain, diabetes and other health effects. If upheld, the award would go into the state’s Medicaid fund, which is facing a projected $400 million deficit next year.

Risperdal, introduced in 1994, is a “second-generation” antipsychotic drug that earned Johnson & Johnson billions of dollars in sales before generic versions became available several years ago. It is used to treat schizophrenia, bipolar disorder and irritability in autism patients. Risperdal and similar antipsychotic drugs have been linked to increased risk of strokes and death in elderly dementia patients, seizures, weight gain and diabetes.

The companies argued that the penalty portions of the Medicaid fraud laws were unconstitutional. But Judge Fox pointed out that the Arkansas Supreme Court had ruled in a 1969 case that fines could not be found excessive, and thus unconstitutional, based solely on a large number of violations. Matt DeCample, a spokesman for Gov. Mike Beebe, said it’s too early to say how the money will be distributed if the fines are upheld. Janssen said if its motion for a new trial is denied, it will appeal. But from all accounts it’s believed that the Arkansas’s Supreme Court will do the right thing and affirm the lower court in this case. It’s refreshing to see a state’s High Court do the right thing in cases involving the powerful drug industry.

Source: Clarion Ledger