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$1.2 Billion Judgment Against Johnson & Johnson Reversed

$1.2 Billion Judgment Against Johnson & Johnson Reversed

Arkansas Supreme Court Reverses Historic Risperdal Judgment

On March 20th, the Arkansas Supreme Court reversed one of the largest pharmaceutical and business fraud judgments in state history. The case, which involved alleged violations of Arkansas Medicaid law and the state deceptive trade practices act, was decided at the trial level in 2012 in Pulaski County.

The original lawsuit was filed when the Arkansas attorney general claimed that pharmaceutical and health care products giant, Johnson & Johnson, failed to provide proper warnings and deliberately concealed risks to consumers regarding the antipsychotic drug, Risperdal. Johnson & Johnson manufactures Risperdal through its pharmaceutical division, Janssen. Risperdal is marketed for use in patients with bipolar disorder and schizophrenia. It has been on the market since 1994.

In 2012, the trial court determined that Johnson & Johnson had violated state law by improperly marketing Risperdal and intentionally concealing dangerous side effects, such as weight gain, diabetes, and stroke. After a one-day trial, Johnson & Johnson was ordered to pay $1.19 billion for Medicaid fraud violations and $11.4 million for violating Arkansas’ deceptive trade practices act. Additionally, the company was ordered to reimburse the state for $181 million in attorney’s fees.

In a March 20, 2014 unanimous decision, the Arkansas Supreme Court ruled that the attorney general had sued under the wrong statutes. The court determined that the state sued under laws pertaining to health care facilities rather than drug manufacturers. As neither Johnson & Johnson nor Janssen is a health care facility, the lawsuit was improper.

Although Johnson & Johnson representatives were pleased by the decision, this is just one of several Risperdal cases that have plagued the large multinational. In November 2013, Johnson & Johnson agreed to pay the federal government and various state governments $2.2 billion to settle civil and criminal cases related to Risperdal. It is also facing a $327 million verdict in South Carolina, where the state supreme court is set to rule on a similar Risperdal case. The Louisiana Supreme Court threw out a $258 million Risperdal judgment in January.