On Thursday, Johnson & Johnson announced that the company has agreed to pay a sum of $181 million for settling consumer fraud claims by 36 U.S. states and the District of Columbia over improper marketing claims on Risperdal, the antipsychotic drug. On similar issues, the company is also charged by federal authorities in separate allegations including improperly promoting the drug for use in nursing homes.
Michael Yang, president of Janssen Pharmaceuticals of J&J said in its statement, “We have chosen this path to achieve a prompt and full resolution of these state claims.” The company also said that the funds set aside for the settlement would be divided amongst the states which choose to participate in the settlement.
Johnson and Johnson also announced that it had put in place a system to ensure compliance with marketing and promotion rules and it would not promote any of its newer antipsychotics for off-label use or for making any false or misleading claims related to those products.
Previously, on the same issues, Johnson & Johnson has reached an agreement in principle with the Department of Justice for settling three civil matters under the False Claims Act involving sales and marketing of Risperdal.
The latest settlement over marketing of Risperdal announced by Johnson & Johnson comes after the company received a number of setbacks in courts across the country. In April, an Arkansas jury found the company guilty of using fraudulent tactics to sell Resperdal and ordered a $1.1 billion penalty. The company has appealed the ruling.
Arkansas did not participate in the settlement announced on Thursday, and its lawsuit also claims that J&J used the state’s Medicaid insurance program for the poor to overcharge for Risperdal. In an earlier lawsuit over similar issues in Texas, the company agreed to settle for $158 million.