Drug maker: No one in SC was harmed in $327M case
COLUMBIA, S.C. (AP) — South Carolina's high court should overturn a penalty of hundreds of millions of dollars over deceptive drug marketing in part because the manufacturer didn't mean to deceive anyone, and no one in the state was hurt, an attorney for a Johnson & Johnson subsidiary argued before justices on Thursday.
Mitch Brown represents Janssen Pharmaceutica Inc., a subsidiary of New Brunswick, N.J.-based Johnson & Johnson. The drug maker is challenging a Spartanburg County jury's 2011 decision that Janssen broke the law by writing to thousands of South Carolina doctors, downplaying the links between diabetes and its schizophrenia drug Risperdal, and by improperly claiming the drug was safer than competing medications, like Eli Lilly & Co.'s Zyprexa.
"The conduct hasn't caused one South Carolinian any harm," Brown told the state Supreme Court. "The state can't get any penalties without showing the element of willfulness. ... There wasn't any evidence that any doctor was misled."
Janssen has been litigating throughout the country over its Risperdal marketing, announcing in August a $181 million settlement with 36 states and the District of Columbia. Janssen admitted no wrongdoing, and South Carolina was not part of that deal.
First launched in 1994, the blockbuster anti-psychotic drug Risperdal lost patent protection in 2008. Johnson & Johnson has said that Risperdal Consta, the long-acting version of the drug, generated $1.4 billion in sales last year.
After the South Carolina jury's decision, a state judge assessed a $327 million penalty against Janssen, the largest drug marketing award in state history and the largest penalty levied for violations of the South Carolina Unfair Trade Practices Act.
Circuit Judge Roger Couch assessed a $300 penalty per sample box of the drug that was distributed. He also assessed a $4,000 penalty per publication of the "Dear Doctor" letter, writing that Janssen knew Risperdal was associated with health problems but intentionally hid studies to that effect, instead telling doctors their drug led to lower incidence of diabetes and weight gain than a competing medicine.
Justice John Kittredge argued to Brown that, while the sample box labels in question had been approved by the U.S. Food and Drug Administration, the drug company should still bear some responsibility in ensuring that its products and marketing aren't also in violation of state laws.
"You're putting it on the back of the FDA to be the police of this," Kittredge said.
John Simmons, who made arguments on behalf of Attorney General Alan Wilson, called the circuit judge's opinion "thoughtful" and said Janssen should have updated its labels as soon as it learned of study results showing the drug's possible links to weight gain and diabetes.
"Janssen had a duty ... to put that in the warning section," Simmons said. "Janssen hid unfavorable clinical evidence."
The court will likely issue its decision in several months. Should they opt to reduce the award against Janssen, Brown asked justices to determine "a reasonable penalty amount" themselves and not leave that decision up to a lower court judge.
The company is also appealing an Arkansas judge's decision ordering Janssen to pay more than $1.2 billion in fines, as well as a $258 million verdict in Louisiana. Two cases against Janssen in Pennsylvania and West Virginia were eventually dismissed.
Kinnard can be reached at http://www.twitter.com/MegKinnardAP