J&J, Feds Reach Deal on One Risperdal Charge


Johnson & Johnson (NYS: JNJ) has come to terms with the Justice Department on one Risperdal marketing charge. It's a single misdemeanor, stemming from a long-running investigation of allegations that the company promoted its antipsychotic drug Risperdal for off-label uses. But that doesn't mean the company's DoJ negotiations are at an end -- far from it, Bloomberg reports.

The feds are "continuing to pursue both criminal and civil actions," J&J said in a quarterly filing. "Discussions have been ongoing in an effort to resolve criminal penalties ... Certain issues remain open before a settlement can be finalized." The government has also decided to join "multiple" whistleblower lawsuits against J&J's Janssen Pharmaceuticals unit, all of which deal with Risperdal marketing practices.

Meanwhile, there are the feds' civil investigations; J&J says it's in negotiations to settle those, too. The probes involve sales of Risperdal and Invega, a follow-up antipsychotic drug. Almost a dozen state attorneys general have sued for deceptive marketing or misleading claims about the drug. And AGs in 40 more states are considering joining the fray. The company disclosed that the state lawyers "have indicated a potential interest in pursuing similar litigation."

The good news for J&J is that settling the federal probes isn't expected to hurt the company's financial position. J&J in May set aside some unspecified amount to cover Risperdal-related legal costs, and now says it's adding to that fund to cover criminal penalties.

Without a dollar amount attached to the misdemeanor charge, it's tough to put this potential settlement in context. Other antipsychotic marketing probes have resulted in no criminal charges, but a big payment -- AstraZeneca agreed to pay more than $500 million to resolve Seroquel-related claims, for instance. Eli Lilly's Zyprexa settlement included a $515 million criminal fine on a misdemeanor charge, and another $800 million in civil claims. But it's probably safe to say that we're not looking at a Pfizer-type deal: The settlement covering Bextra marketing included a felony plea -- and a total of $2.3 billion in payments.

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