Johnson & Johnson plans $600 million charge linked to Risperdal sales
June 12th, 2012 // 12:18 pm @ jmpickett
Johnson & Johnson said on Friday it expects to take a special charge of about $600 million in the second quarter to bolster reserves for a potential settlement of civil lawsuits related to how it marketed schizophrenia treatment Risperdal and other drugs.
The hefty charge would also fund potential settlements for litigation involving marketing of Invega, another J&J schizophrenia treatment, as well as Natrecor, a medicine for congestive heart failure.
The money being set aside would also help cover potential settlements involving Omnicare Inc, a pharmacy operator that provides medicines to patients in nursing homes and long-term care facilities. Federal investigators have alleged J&J made illegal payments to Omnicare to purchase and recommend Risperdal for its patients.
J&J is facing a number of lawsuits from states that allege it improperly marketed Risperdal for patients and conditions for which it was not approved by U.S. regulators – including elderly residents of nursing homes.
The diversified healthcare company declined to provide further comment about the planned charge, the latest in big set-asides for Risperdal litigation. J&J in January took a fourth-quarter charge of $3.3 billion, which it said was largely related to ongoing Risperdal lawsuits and investigations.
The U.S. Department of Justice for years has been investigating allegations that J&J marketed the one-time blockbuster medicine for unapproved uses. Federal prosecutors in Washington, D.C., earlier this year nixed a tentative $1 billion settlement with J&J, holding out for a bigger settlement with the drugmaker, according to published reports.
An Arkansas state judge in April ordered J&J to pay a $1.1 billion penalty after a jury found the company guilty of using fraudulent tactics to sell Risperdal.
Arkansas alleges J&J deceived thousands of doctors in the state by touting the drug as better and safer than rival therapies and marketing it for unapproved uses in children and the elderly.
In January, J&J agreed to pay $158 million to settle a Texas lawsuit that alleged improper marketing of Risperdal to state residents on the Medicaid health program for the poor, including children and adolescents.
