Johnson & Johnson (JNJ:US) officials hid the risks of the antipsychotic drug Risperdal to boost sales and should be held liable for misleading Arkansas doctors and patients, a lawyer said.
J&J’s Janssen unit made misleading claims about Risperdal’s effectiveness in a letter to more than 6,000 Arkansas doctors and downplayed its diabetes risks on warning labels, Fletch Trammell, one of the state’s lawyers, told a jury in Little Rock today. Arkansas is seeking more than $1.25 billion in penalties over the Risperdal marketing campaign.
“They hid those risks, they buried them in the label,” Trammell told jurors in closing arguments of the state’s lawsuit over the marketing campaign. Janssen officials “had a lot at stake. If Risperdal went down, the company went down, too.”
It’s the fifth jury trial over states’ claims that J&J, the second-biggest (JNJ:US) maker of health products, hid Risperdal’s diabetes risks and tricked Medicaid regulators into paying millions of dollars more than they should have for the medicine. J&J ended the most-recent trial in Texas with a $158 million settlement in January.
J&J’s lawyers countered that jurors hadn’t heard testimony from a single Arkansas resident who claimed to be harmed by the drug and state officials never warned consumers about Risperdal’s alleged health threats.
“They didn’t run off and sound the alarm at the time this suit was filed,” James Simpson, a lawyer for the companies, told jurors today. Arkansas officials never said “Whoa, whoa, whoa, this stuff is dangerous.”
Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. The drug generated $3.4 billion in sales in 2008, or 5.4 percent of New Brunswick, New Jersey-based J&J’s revenue (JNJ:US), according to company filings. Sales of the drug fell to $527 million in 2010, according to earnings reports.
Along with contending that J&J and Janssen defrauded the Medicaid program by failing to properly outline the antipsychotic medicine’s risks on the warning label, Arkansas officials allege J&J officials deceptively marketed the drug as safer and better than competing medicines.
The state also argues that the companies marketed the drug for “unapproved uses, including various symptoms in children and the elderly” after being warned by federal authorities to halt such sales, according to the state’s suit.
The U.S. has been investigating Risperdal sales practices since 2004, including allegations that the company marketed the drug for unapproved uses, J&J executives said in a U.S. Securities and Exchange Commission filing (JNJ:US) last year.
The U.S. Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys general, people familiar with the settlement talks said last month.
The case is State of Arkansas v. Ortho-McNeil-Janssen Pharmaceuticals Inc., CV07-15345, Pulaski County Circuit Court (Little Rock).
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