Risperdal lawsuit settlement: Largest Medicaid fraud case in Texas

Jan 21 2012

Texas and Janssen Pharmaceuticals reach a $158 million settlement on a suit claiming that the company lied about the efficacy of the anti-psychotic medicine.

The Associated Press: Johnson & Johnson Settles Texas Lawsuit For $158M
Texas and a subsidiary of health care giant Johnson & Johnson reached a $158 million settlement in a Medicaid fraud lawsuit Thursday .... The lawsuit was one of dozens of state and federal cases alleging that the company committed fraud by making false or misleading statements about the safety, cost and effectiveness of the expensive anti-psychotic medication Risperdal, and improperly influencing officials and doctors to push the drug (Vertuno and Lozano, 1/19).

Reuters: J&J To Pay $158 Million To Settle Texas Risperdal Case
The deal settles claims brought by Texas in 2004 and involves alleged Medicaid overpayments during the years 1994 to 2008 "and will circumvent potentially lengthy and costly appellate activities," according to a statement from J&J's Janssen Pharmaceuticals unit (MacLaggan, 1/19).

The Texas Lawbook/The Dallas Morning News: Johnson & Johnson Settles Texas Medicaid Fraud Lawsuit For $158 million 
Texas officials and a whistle-blower had jointly sued Johnson & Johnson and its subsidiary Janssen Pharmaceuticals Inc., accusing them of falsely marketing the prescription medication Risperdal to doctors for off-label treatments not approved by the U.S. Food and Drug Administration (Elliott, 1/19).

The Texas Tribune: State Settles Largest-Ever Medicaid Fraud Suit 
"Today's agreement sends a strong message that the state will pursue those who defraud Texas taxpayers," [Texas Attorney General Greg] Abbott said in a statement. "Johnson & Johnson's scheme to profit from the Medicaid program by overstating the safety and effectiveness of an expensive drug and improperly influencing officials ended up costing taxpayers millions of dollars" (Rich, 1/19). 

The Philadelphia Inquirer: J&J To Pay $158M In Risperdal Case
Allen Jones used to work for Pennsylvania taxpayers, and his job was to look into wrongdoing. An investigator for the state's Office of Inspector General, Jones uncovered payments from pharmaceutical companies to state officials in exchange for favorable treatment of their antipsychotic drugs in state medical programs. Jones said he got fired for doing his job. That was in June 2004. On Thursday, Jones learned he will share in [the] $158 million (Sell, 1/20).

Meanwhile: 

The Associated Press/ABC News: Merck to Settle Canada Vioxx Suits For Up To C$37M
Merck voluntarily pulled Vioxx from the market on Sept. 30, 2004, after its own research found the popular treatment for arthritis and other types of pain doubled risk of heart attack, stroke and death. … Last November, Merck agreed to pay $950 million to resolve government investigations into its marketing of Vioxx, including $321.6 million in criminal fines and $628.4 million in a civil settlement to be split by the federal government and state Medicaid programs  (Johnson, 1/20).