January 20, 2012 — Texas’s largest-ever Medicaid fraud lawsuit has settled for $158 million. Johnson & Johnson, the largest health company in the U.S., had previously settled with the federal government for $1 billion to end civil litigation regarding its marketing of Risperdal. Several states have accused the company of engaging in aggressive off-label promotion of Risperdal for use in children with ADD and other psychiatric conditions. In addition, they accuse the company of overstating the safety and effectiveness of the medication, influencing government health officials with money, promoting Risperdal above cheaper generic alternatives, and ultimately costing the Texas taxpayers millions of dollars in unnecessary over-charges to the Medicaid system.
Legal action against the drug-company marketing Risperdal began in 2004, when Allen Jones filed a whistleblower lawsuit in Pennsylvania. Jones had been an investigator for the Office of the Inspector General, and was investigating payments that the drug-company had been making to government health officials. He claims that he was fired as a result of these investigations, but the lawsuit continued.
Texas Attorney General Greg Abbott joined the lawsuit on behalf of the Texas Medicaid program and Texas taxpayers.
The lawsuit Johnson & Johnson agreed to settle had some serious allegations regarding its marketing of Risperdal, a powerful anti-psychotic medication that the FDA had only approved for a limited use: adults with schizophrenia. Though there were no studies on the effect of the powerful anti-psychotic in children, the company actively engaged in promoting the medication “off-label” for use in children with psychiatric disorders, including ADD.
As early as 1999, the company had studies showing that Risperdal significantly increased a user’s risk of developing diabetes, but this information was withheld from the FDA. The studies found that patients developed “medically serious weight gain” that led them to develop diabetes. Other side effects of Risperdal included drowsiness and severe withdrawal in some patients.
Risperdal was more expensive than other medications, carried some serious side effects, but was no more effective than existing medications.
During the trial, attorneys presented evidence that the drug company had paid three doctors $1 million to develop and promote guidelines for the state’s Medicaid program that would tout Risperdal as a “first choice” for schizophrenia medication. They also paid another doctor to promote the guidelines in other states.
Several other states have joined the fracas. In response to marketing letters sent to doctors that promoted Risperdal over other medications, Louisiana and South Carolina sued Johnson & Johnson. The company lost in South Carolina to the tune of $327 million, and $257.7 million in Louisiana, with attorneys’ fees of $73.3 million. There are seven more states with pending lawsuits. A case in Arkansas is set to begin in March.
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