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$158 Million Settlement in Texas Risperdal Lawsuit


January 19, 2012 — Johnson & Johnson, the world’s largest health company and the manufacturer of the anti-psychotic medication Risperdal, has agreed to settle a class-action lawsuit for $158 million. The company allegedly promoted the medication for off-label use in children, and also misrepresented its safety and effectiveness. The settlement is the largest ever in Texas for a Medicaid fraud lawsuit.


The Risperdal settlement comes at a time when the Obama administration is poised to require drug companies publicly reveal payments that they make to doctors. It is common practice for these companies to pay doctors thousands, and sometimes millions of dollars in exchange for research, information, speaking, and more. Some consumer advocates have criticized these payments and perks as jeopardizing the best interests of patients.

Texas Attorney General Greg Abbott joined a whistleblower lawsuit filed in Pennsylvania in 2004 by Allen Jones, an ex-investigator for the state’s Office of the Inspector General. Jones claims that he was fired after investigating payments that the drug-company made to a pharmacist in Pennsylvania’s government.

The lawsuit alleged that the drug-company used questionable research and influenced state health officials with trips, meals, and other perks to convince them to put Risperdal on the list of drugs covered by the state Medicaid program.

Early safety studies of Risperdal suggested that it could lead to diabetes and weight-gain in children. In addition, it was no safer or more effective than generic versions of the medication — but it was significantly more expensive.

The lawsuit against the drug-company alleges that they overstated the safety and effectiveness of Risperdal, influenced government health officials, and ultimately cost taxpayers millions of dollars when doctors prescribed the expensive medication over cheaper alternatives.

The lawsuit against the drug-company also alleges that they aggressively marketed the medication as an antipsychotic for children, particularly as an ADD medication, even though the FDA had only approved it to treat schizophrenia in adults. The impact of this powerful medication on the developing minds of children had not been studied in clinical research.

The side effects of Risperdal in children included serious weight gain that led patients to develop diabetes, drowsiness, and severe withdrawal in some patients.

During the trial, attorneys also presented evidence that Johnson & Johnson had played a key role in the development of state guidelines that would advise doctors to choose Risperdal as a “first choice” for schizophrenia. The drug company paid three doctors nearly $1 million to help develop and promote the state guidelines. The company also paid another doctor, Steven Shon, to promote the drug guidelines in other states.

The federal government has been investigating the marketing practices of Johnson & Johnson since 2004, and the company has agreed to pay the U.S. government $1 billion in damages to end civil investigations. The company lost a $327 million lawsuit in South Carolina, and a $257.7 million lawsuit in Louisiana (in which a judge granted attorneys fees of $73.3 million). There are pending lawsuits in seven more states, with an Arkansas case set to begin in March.


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