J&J Ordered to Pay $327 Million Penalty in False-Claim Suit

A South Carolina court found that Ortho-McNeill-Janssen Pharmaceuticals, a subsidiary of Johnson and Johnson (J&J), violated state consumer-protection laws by using misleading marketing for its antipsychotic drug, Risperdal. Janssen Pharmaceuticals, the maker of the drug, received a Warning Letter from FDA in April 2004 over misleading product claims made in a “Dear Doctor” letter that the company sent to healthcare providers in November 2003. According to FDA, the Janssen promotional material minimized the risks of hyperglycemia-related adverse events associated with Risperdal, and misleadingly claimed that Risperdal was safer than other atypical antipsychotics.

The South Carolina court ordered J&J to pay $327 million in fines. According to an article in Bloomberg, Circuit Court Judge Roger Couch assessed a $300 penalty per sample box of the drug that was distributed and a $4000 penalty for the publication of the “Dear Doctor” letter, for a total penalty of more than $327 million. A much larger penalty could have been assessed if the fines had been levied on a per-prescription basis.

J&J plans to appeal the ruling. According to Bloomberg, the South Carolina case is one of about 10 such suits brought by states over misleading marketing of Risperdal. J&J succeeded in getting the charges dismissed in a similar suit in Pennsylvania and won an appeal after being fined in West Virginia, after which the state dropped its case.