by Julie E. Kurzrok
On June 3, Judge Roger Couch of the Circuit Court of Spartanburg, South Carolina ordered Ortho-McNeil-Janssen Pharmaceuticals ("Janssen"), a division of Johnson & Johnson, to pay $327 million for deceptive marketing of its drug Risperdal® (risperidone), an atypical antipsychotic drug. The South Carolina Attorney General sued Janssen in 2007 alleging that Janssen made misleading claims about Risperdal® through its marketing and labeling activities. On March 22, 2011, the jury returned a verdict of $360 million, which Judge Couch later lowered to $327 million.
The State's case centered on a Dear Health Care Provider ("DHCP") letter that Janssen sent on November 10, 2003 to approximately 7,200 South Carolina physicians. The State alleged that in the letter Janssen falsely claimed that Risperdal® was safer and more effective than its competitors. The State further alleged that the Risperdal® package label violated South Carolina's Unfair Trade Practices Act, which allows for a penalty of up to $5,000 per violation.
On September 11, 2003, FDA notified Janssen that in response to post-marketing reports of diabetes, and after evaluating the risks, FDA now required the addition of warning language regarding diabetes and hyperglycemia in the package insert for all atypical antipsychotics. On November 6, 2003, Janssen filed supplemental new drug applications ("sNDAs") with the additional information. FDA approved the sNDAs, and requested that Janssen send a DHCP letter including the new risk information.
Janssen sent its DHCP letter on November 10, 2003. On April 19, 2004, FDA issued a warning letter to Janssen stating that its DHCP letter was false or misleading and violated the Federal Food, Drug, and Cosmetic Act.
In the warning letter, FDA stated that Janssen's DHCP letter failed to disclose the additional risks added to the product label, minimized the risk of hyperglycemia-related adverse events, failed to recommend glucose control monitoring, and claimed that Risperdal® was safer than other atypical antipsychotic drugs.
The South Carolina jurors ruled that Janssen's DHCP letter was misleading and violated South Carolina's Unfair Trade Practices Act. The South Carolina Attorney General argued that Janssen's failure to include the risk information in the DHCP letter affected more than 700,000 prescriptions for Risperdal® in South Carolina. Further, the attorneys argued that the deceptive information was presented in approximately 185,000 sales calls and close to 500,000 sample boxes of Risperdal®.
Judge Couch held that Janssen was liable for violating South Carolina's Unfair Trade Practices Act for 7,180 DHCP letters and 36,372 instances of in-person marketing. Based on these violations, the Judge applied a $4,000 per violation penalty for a total of $174.2 million. Judge Couch also found that 509,499 sample boxes of Risperdal® had labels with deceptive information, and imposed a $300 per violation penalty for an additional $152.8 million. Janssen argued that the Judge's separate calculation based on prescriptions, letters, and calls was "triple counting," and was unfair.
This case is the third of ten related cases involving the marketing of Risperdal®. Janssen sent its DHCP letter to approximately 700,000 doctors across the United States. In June 2010, Janssen won dismissal of a suit in Pennsylvania where it was accused of hiding Risperdal®'s diabetes risk. In October 2010, a jury in Louisiana ordered Janssen to pay $257.7 million for making misleading claims regarding Risperdal®'s safety. In 2009, a judge in West Virginia ordered Janssen to pay $3.95 million for making misleading claims about the risks and benefits of Risperdal®, however the state dropped the case after Janssen won an appeal.
Janssen intends to appeal Judge Couch's decision.