J&J Wins Reversal of $1.2B Risperdal Settlement

Washington, DCJohnson & Johnson has won a reversal of a $1.2 billion settlement of a consumer fraud action concerning the marketing of Risperdal. On Thursday, an Arkansas Supreme Court reversed the earlier ruling which concluded that J&J had improperly marketed its anti-psychotic drug and concealed the its health risks.

The settlement, imposed in April 2012, was based on the jury’s findings that J&J and its subsidiary Janssen Pharmaceuticals had violated Arkansas state law concerning Medicaid fraud and deceptive trade practices. This is just one of several legal battles the pharmaceutical giant is facing, which include personal injury and defective product lawsuits. A decision by South Carolina's Supreme Court on whether to overturn $327 million of penalties in a similar case against J&J is pending. And, in January, the Louisiana Supreme Court overturned a $258 million award in a similar case.

This week’s reversal, from Arkansas' highest court, is based on a finding that the defendants had been sued under the wrong law--a law covering healthcare facilities, rather than drug companies.

"Janssen is indisputably not a healthcare facility and applying for certification or re-certification as described in the statute," Associate Justice Karen Baker wrote for the court. "Hence, the statutory provision is not applicable."

The decision was unanimous, though three of the Supreme Court's seven justices dissented from some of the reasoning. The Arkansas court also determined that J&J did not have pay the state's $181 million in attorney's fees.

Risperdal (Risperidone) is an atypical antipsychotic that works by changing the activity of certain natural substances in the brain. Developed by Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, Risperdal was approved by the FDA in 1993 for the treatment of schizophrenia in adults. Risperdal side effects include Risperdal gynecomastia (male breast growth), tardive dyskinesia, high blood sugar and diabetes, stroke, heart attack and even death. As of September 2012 more than 420 Risperdal lawsuits had been filed, 130 of which are Rispedal gynecomastia claims.