The South Carolina Supreme Court has further reduced the judgment against Ortho-McNeil-Janssen Pharmaceuticals Inc., a Johnson & Johnson subsidiary, in the state’s suit over deceptive marketing of the antipsychotic Risperdal. An additional $12 million was taken away in the ruling. The court said its February ruling halving the original $327 million in penalties was still $12 million too high. The court filed a substituted opinion in response to a petition for rehearing. The main purpose of the ruling was to correct a calculation error in its earlier order that put Janssen on the hook for $136 million in civil penalties. The judgment should have been $124.3 million, the court said. The court also added that its ruling is supported by federal law.
In its 2007 suit, South Carolina accused Janssen of engaging in unfair and deceptive acts by hiding the risks of Risperdal on labels attached to sample packs sent to doctors, and sending “dear doctor” letters that touted Risperdal as safer than other competing brands of antipsychotic medications. The state had argued that Janssen sent the letter to protect billions of dollars in Risperdal sales.
In June 2011, a South Carolina state court judge ruled that Janssen should pay $327 million in civil penalties for 553,055 separate violations of the South Carolina Unfair Trade Practices Act (SCUTPA). In February, the state high court cut the penalty to $136 million, limiting claims to three years from a January 2007 tolling agreement between the subsidiary and the state.
States including Louisiana and West Virginia sued over the drug after the U.S. Food and Drug Administration (FDA) ordered the company in 2003 to revise prescribing information for Risperdal to include a warning for an increased risk of diabetes among users. In a footnote in its substituted opinion, the South Carolina high court acknowledged that other state actions were settled for much less – including a settlement with Arkansas for $7.75 million and a settlement with 36 states and Washington, D.C., averaging $4.89 million per state.
However, the South Carolina Supreme Court was not inclined to discount the judgment further. “We decline to rely on average settlements as dispositive, especially when we are constrained by an abuse of discretion standard of review,” the justices said. The court adjusted the penalties by around $12 million because it previously had the wrong number of drug samples sent to physicians from February 2004 until the complaint was filed in April of 2007. The initial decision had based the $100 per box penalty on 345,454 sample boxes. The new opinion says that Jansssen handed out only 228,447.
The court also augmented its February ruling to counter Janssen’s argument that the jury had been improperly instructed on what constitutes “unfair,” saying that the SCUTPA was intended to be guided by federal unfair trade policies and that the language used to instruct the jury was in line with Federal Trade Commission policy statements on what constitutes unfairness and deception. The court said other issues that Janssen had raised in its rehearing petition were “not preserved for appellate review.”
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.