On April 11, Arkansas State Court Judge Tim Fox entered judgment on fines totaling $1.2 billion against pharmaceutical giant Johnson & Johnson and its subsidiary Janssen Pharmaceuticals (collectively "J&J") for wrongdoing surrounding their prescription antipsychotic medication, Risperdal® (risperidone). (No. CV07-15345.) FDA originally approved Risperdal® in 1993 for the treatment of psychotic disorders like schizophrenia.
Arkansas Attorney General Dustin McDaniel alleged, among other things, that J&J violated Arkansas' false claims act and deceptive trade practices act in marketing and selling Risperdal®. In particular, he alleged that J&J caused improper reimbursement for prescriptions covered by Medicaid by falsely asserting that Risperdal® was safer and more effective than comparable medications and not adequately warning about serious side effects, including diabetes and neurological complications. According to the complaint, J&J sold and marketed Risperdal® for off-label uses, including the treatment of bipolar disorder, dementia, and mood, and anxiety disorders.
After a jury determined that J&J violated the Arkansas False Claims Act and Arkansas Deceptive Trade Practices Act, Fox evaluated damages. He found nearly a quarter million instances in which J&J violated the Arkansas False Claims Act, based on the number of Risperdal® prescriptions written in the state. He also found nearly 5,000 instances in which J&J violated the Arkansas Deceptive Trade Practices Act, based on the number of Risperdal® direct mailings to Arkansas physicians. As a result, he held that J&J improperly induced the state to spend Medicaid funds for Risperdal® prescriptions. The statutory minimum penalties--ranging from $2500 to $5000 per violation--resulted in a judgment of $1.2 billion. J&J has moved for a new trial, contending that the fines dwarf actual Medicaid payments for Risperdal®, which J&J argues are no more than $8.1 million. J&J further contends that the state showed no evidence that any patient suffered actual harm, that any doctor was misled into writing a prescription that was not warranted, or that any prescription did not warrant reimbursement. The Arkansas False Claims Act, however, requires only that a person "[k]nowingly makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under the Arkansas Medicaid program." J&J may be better off trying the Eighth-Amendment route. See United States ex rel. Bunk v. Birkart Globistics GmbH & Co., Nos. 1:02cv1168 & 1:07cv1198, 2012 U.S. Dist. LEXIS 18445 (E.D. Va. Feb. 14, 2012).