Johnson & Johnson has agreed to pay $158 million to settle charges with the state of Texas over allegations that the global drug manufacturer overcharged through Medicaid and illegally promoted the anti-psychotic drug Risperdal to doctors and other providers for use in children and young patients.
The trial on those charges began Jan. 10 in Austin, Tex., which is where the settlement was announced.
The Texas court case was just one of dozens involving the J&J and its Janssen Pharmaceuticals subsidiary. J&J is in New Brunswick, N.J., and Janssen is in nearby Titusville. The Texas case was filed in 2004. J&J is reportedly also negotiating a settlement with federal government, but there are 63 individual cases pending in Philadelphia.
Whistle-blower Allen Jones was originally working for the Pennsylvania Inspector General's office when he uncovered Janssen's practices in Texas.
The evidence presented before Thursday showed that Janssen “subverted science and induced others to betray the people they were supposed to take care of,” Jones said, according to Bloomberg News. “To me that’s reprehensible.”
Janssen issued this statement:
"Janssen Pharmaceuticals, Inc. announced today it has reached a settlement with the State of Texas in ongoing litigation related to sales and marketing of the anti-psychotic prescription medication Risperdal (risperidone).
"Under the terms of the settlement, Janssen will pay $158 million in full resolution of all claims in Texas. This settlement represents a resolution to claims brought by the State in 2004 for alleged Medicaid overpayment during the years 1994-2008, and will circumvent potentially lengthy and costly appellate activities.
"The settlement will be allocated to the original plaintiff, his attorneys, the State of Texas, and the federal government, which provides Medicaid reimbursements.
"Settlements frequently are reached to bring to a conclusion a long-standing litigation where the potential financial exposure to the Company is significant, the outcome is uncertain despite the facts and where there are likely to be long and expensive appellate activities regardless of the outcome at trial.
"Janssen is committed to ethical business practices, and has policies in place to ensure its products are only promoted for their FDA-approved indications."
The complete FDA label for Risperdal is here.