Johnson & Johnson Agrees to $2.2 Billion Risperdal Settlement

Johnson & Johnson has agreed to pay up to $2.2 billion to settle charges it illegally marketed the anti-psychotic drug Risperdal for conditions other than it is approved to treat.

According to AP and Wall Street Journal reports this week following ongoing settlement talks between the pharmaceutical giant, the Dept. of Justice, and several state attorneys general, that accord includes at least $400 million to settle criminal charges against the company. The exact amount of the settlement will be determined by the number of states which agree to its terms.

Federal authorities had threatened to ban Johnson & Johnson from marketing its products to the Medicare program, a move that could have drastically set the company backward financially. The charges were filed against the company for allegedly offering kickback payments equalling tens of millions of dollars to a company that sold prescription drugs to a large network of nursing homes.

J&J was accused of marketing Risperdal as a safe and effective treatment for some symptoms of dementia among the elderly. Risperdal is only approved to treat schizophrenia and symptoms of bipolar disorder and actually increases the risk of death among the elderly who suffer from dementia. The drug was being marketed illegally to treat symptoms like irritability and aggression among dementia sufferers. It was also illegally marketed to treat symptoms of Alzheimer’s disease, which also increased the risk of death and serious injuries to patients.

The pharmaceutical giant allegedly hired Omnicare Inc. to distribute Risperdal to its network of nursing homes across the country for these treatments. While it is not illegal for a physician to prescribe a drug for an off-label treatment, it is a violation of Food and Drug Administration laws for the manufacturer of the drug to do so. Any new indications for a prescription drug must first get FDA approval and requires extensive clinical safety trials to determine the drug provides a benefit to a new class of patients. Omnicare has already agreed to a $90 million settlement over charges tied to this investigation in 2009. Its sales of Risperdal tripled to $280 million during a 5-year period when it was alleged to have accepted the largess from Johnson & Johnson.

The Justice Dept. had been seeking at least a $2 billion settlement with Johnson & Johnson and had rejected a $1 billion offer from the drug company earlier this year. The settlement will conclude other state investigations launched after they realized they had paid millions of dollars in Risperdal prescriptions through the Medicare and Medicaid programs for indications it was not approved to treat.

Even for the conditions it is approved to treat, Risperdal is an expensive and dangerous option among other drugs in its class. Previous studies on the drug’s effectiveness found that more patients are likely to suffer stroke while taking Risperdal and are 50 percent more likely to develop diabetes than patients taking another drug in the same class.

The drug has also been linked to side effects like an irregular heartbeat, weak muscles and muscle spasms, fever, weight gain and constipation, and headaches. Serious side effects of Risperdal include Neuroleptic Malignant Syndrome (NMS) and Tardive Dyskinesia.

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