Sunday, December 28, 2014

Public disclosure to the SEC? Sure. How about a jury?

A plaintiff suing Johnson & Johnson over the side effects of the antipsychotic drug Risperdal and allegations that the company promoted the drug off label wants to show the jury documents filed by J&J with the Securities and Exchange Commission that say J&J is close to admitting to criminal violations in a federal case.

Public disclosure to the SEC? Sure. How about a jury?

A plaintiff suing Johnson & Johnson over the side effects of the antipsychotic drug Risperdal and allegations that the company promoted the drug off label wants to show the jury documents filed by J&J with the Securities and Exchange Commission that say J&J is close to admitting to criminal violations in a federal case.

The filing reference is to the ongoing negotiations with the Justice Department, with news reports suggesting it might end in a payment of up to $2.2 billion. The 10-Q filed in August says there is an "agreement in principle" over "criminal charges pursuant to a single misdemeanor violation." The SEC filing notes that nothing is finalized.

The suit is in the Philadelphia Court of Common Pleas.

It is unclear when Judge Mark Bernstein will rule on the motion.

An Inquirer story on the Thursday motion is here.

Public companies are required to file documents with the SEC to give investors information, and the CEO signs the documents attesting to the validity. Some investors just look at the revenue, profits, losses, etc. But pending litigation is also included, though it is usually very deep in the document.

J&J has said in past filings that the Justice Department has been investigating the company since 2004 over Risperdal.

The 10-Q form filed in August has the second-quarter financial information, but also these paragraphs:

In 2011, discussions to resolve criminal penalties under the Food Drug and Cosmetic Act related to the promotion of Risperdal resulted in an agreement in principle with the United States Attorney's Office for the Eastern District of Pennsylvania on key issues relevant to a disposition of criminal charges pursuant to a single misdemeanor violation of the Food Drug and Cosmetic Act, but certain issues remain open before a settlement can be finalized. During 2011, the Company accrued amounts to cover the financial component of the proposed criminal settlement.

The Company has also now reached an agreement in principle with the United States Department of Justice to settle three pending civil False Claims Act matters that are pending in (1) the Eastern District of Pennsylvania concerning sales and marketing of Risperdal and Invega; (2) the Northern District of California regarding the sales and marketing of Natrecor, discussed separately below; and (3) the District of Massachusetts alleging that the defendants provided the Omnicare, Inc. (Omnicare) long-term care pharmacy with rebates and other payments regarding Risperdal and other products, discussed separately below. Assuming these agreements are finalized, they will resolve the federal government's claims under the federal False Claims Act, resolve all pending state and federal government litigation regarding Omnicare and Natrecor, and settle the Risperdal Medicaid-related claims for those states that opt into the settlement. On a parallel track, the Company has reached an agreement in principle with representatives of a group of 38 states and the District of Columbia to settle non-Medicaid actions in connection with the sales and marketing of Risperdal and Invega. With all the tentative settlement agreements described above, issues remain open that must be resolved before the settlements can be finalized."

The link to the SEC document is here.

 

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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