Johnson & Johnson faces $327 million penalty over Risperdal marketing

Civil penalties amounting to just over $327 million have been announced in the case of State of South Carolina versus Ortho-McNeil-Janssen Pharmaceuticals and parent company Johnson & Johnson (NYSE: JNJ), where the judge rule that they deceptively marketed the anti-psychotic drug Risperdal (risperidone) deceptively.

In a regulatory filing with the Securities and Exchange Commission last month, J&J said it had set aside an unspecified amount of money for a potential settlement of the probe into whether its Ortho-McNeil Janssen unit had promoted the antipsychotic drug Risperdal (risperidone) for unapproved uses (The Pharma Letter May 16).

The verdict amount is based upon violations found with the drug labels and "dear doctor" letters. Regarding the drug label violations, the judge ruled that 509,499 package inserts for Risperdal were distributed with sample boxes, and levied $300 per violation for a total drug label awarded damages of $152,849,700. Regarding the "dear doctor" letter violations, the judge ruled that 7,184 letters were mailed and 36,372 were provided during sales calls, and levied $4000 per violation for a total "dear doctor" letter awarded damages of $174,224,000. The combination of the drug label and letter damages of $327,073,700 amounts to the highest verdict brought against Janssen for the drug Risperdal.