Johnson & Johnson subsidiary Janssen Pharmaceuticals announced that it will pay about $181 million under a settlement and consent decree with 36 states and the District of Columbia over allegations that it illegally promoted and marketed Risperdal (risperidone). In July, sources suggested that Johnson & Johnson would pay as much as $2.2 billion to resolve the claims, including a criminal fine of as much as $600 million. The final sum, however, hinged on how many states would agree to the settlement.
The lawsuit claims Johnson & Johnson paid kickbacks to a company that provided prescription drugs to nursing home patients in order to increase sales of Risperdal, a drug approved to treat symptoms of schizophrenia and bipolar disorder. The drug has been associated with an increased risk of death in elderly patients with dementia.
Janssen Pharmaceuticals noted that the settlement is not an admission of wrongdoing or violation of any law and that all parties agreed the payment is not considered a fine or penalty. Plaintiffs say the agreement should send a message to all drug companies that promoting and marketing of drugs for off-label purposes will not be tolerated.
The agreement is separate from a tentative settlement Johnson & Johnson reached with its shareholders. That lawsuit claims the drug company’s management allowed serious problems in the company to persist for years without attempting to fix them, including paying kickbacks to doctors and pharmacists to boost drug sales, marketing drugs for unapproved uses, and allowing for manufacturing deficiencies that were so severe they resulted in numerous product recalls.