Photo: Wikimedia Commons
Johnson & Johnson has been dealt one of the largest financial punishments ever for a state fraud case.An Arkansas judge ordered the company and subsidiary Janssen Pharmaceuticals to pay $1.19 billion for around 240,000 violations of state Medicaid law and an additional $11 million for violating the state’s deceptive practices laws, reports Katie Thomas at the New York Times.
It’s because of an antipsychotic drug called Risperdal, which has gotten J&J in trouble over the past two years. A jury found that the companies “minimized or concealed the dangers associated with an antipsychotic drug,” notably diabetes and weight gain.
J&J sent a letter in 2003 to thousands of doctors with the claim that Risperdal was safer than other antipsychotics, which the jury deemed a “false or deceptive act,” according to Ed Silverman at Pharmalot.
Here’s the statement J&J sent to Pharmalot:
“We are disappointed with the judge’s decision on penalties. If our motion for a new trial is denied, we will appeal … The state did not show any Arkansas patient was ever harmed by using Risperdal, that any Arkansas physician or Arkansas Medicaid was ever misled by the label or package insert, or that the state ever paid for a prescription that was not properly written and eligible for reimbursement.”
Pharmaceutical companies are especially exposed to lawsuits like this, so they have to always be careful. J&J decided to stand its ground to defend Risperdal, and it lost this one in a big way. While this isn’t devastating to J&J’s overall business, a $1.2 billion hit still a huge blow.
Business Insider Emails & Alerts
Site highlights each day to your inbox.