Arkansas judge fines J&J $1.2 billion

An Arkansas judge fined Johnson & Johnson $1.2 billion Wednesday because the health-care giant’s Janssen subsidiary marketed the antipsychotic drug Risperdal in misleading ways through that state’s Medicaid system.

The award, if upheld on appeal, could reverberate through the many courts in which J&J is fighting lawsuits about the drug, which was approved only for schizophrenia and bipolar mania but was prescribed for other ailments.

“This is the third one in a row that they’ve lost, and when you see a pattern like this, sometimes discretion is the better part of valor when you’re trying to decide about settling,” said University of Richmond law professor Carl Tobias, who specializes in product liability.

Johnson & Johnson is based in New Brunswick and has operations in the Philadelphia region, but it also spends money with Center City law firms. Several prominent health-care attorneys from local firms declined comment Wednesday because they or their firm works for J&J.

The company has been fighting individual, class-action, state, and federal cases over Risperdal, and the financial costs are growing.

The three state losses Tobias referred to were in Louisiana ($258 million), South Carolina ($327 million), and now Arkansas ($1.2 billion). J&J paid $158 million to settle the Texas case before it reached the jury — a case brought by Pennsylvania whistle-blower Allen Jones.

The federal government, which is working with several states, is reportedly negotiating with J&J and increased its demand to $1.8 billion after the company settled the Texas case.

“The Justice Department might well be reconsidering again,” Tobias said.

A Justice Department spokesman declined comment.

On Tuesday in Little Rock, a jury needed only three hours to decide that J&J had downplayed and hidden the risks of taking Risperdal. On Wednesday, Circuit Judge Tim Fox fined the company $5,000 for each of nearly 240,000 violations of the state’s Medicaid fraud law, then added an $11 million fine for 4,500 violations of state law regarding deceptive practices.

Arkansas attorney general Dustin McDaniel said in a statement that the judge’s decision “sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the FDA, patients and doctors in order to defraud Arkansas taxpayers of our Medicaid dollars. These two companies put profits before people, and they are rightfully being held responsible for their actions.”

A Janssen spokeswoman said that if its motion for a new trial is denied, the company would appeal to the Arkansas Supreme Court.

“During the nearly three-week trial, Janssen presented abundant evidence showing the company acted responsibly and fully complied with all laws and regulations” regarding Risperdal, the company said in a statement.

Pennsylvania had its suit dismissed in 2010, but an appeal hearing is scheduled for May 16.

“They had a couple early successes, before a lot of the expert evidence emerged,” said Philadelphia lawyer Stephen Sheller, who represents about 60 plaintiffs in a case pending here. “It was the same thing with asbestos litigation. You learn as time goes on, but the facts are out now.”