Johnson & Johnson $1 Billion Charges Involving Risperdal

By: Jennifer Hong
01/06/2012 08:28 AM ET

Johnson & Johnson 1 Billion Risperdal – Johnson and Johnson must pay over $1 billion for criminal charges involving Risperdal.

Last week, the Fortune 500 pharmaceutical company reached an agreement with the Pennsylvania attorney general to pay the large sum of money as a misdemeanor charge in relation to their unapproved marketing of the antipsychotic drug; they are still in negotiations over a possible corruption plea.

The sales practices of Johnson and Johnson, for Risperdal, have been under investigation by the US government since 2004. There have been allegations that the company marketed the medication for uses that had not been approved by the federal government.

It generated $24.2 billion for Johnson and Johnson from 2003 to 2010; however, sales declined after 2010 when the company lost their patent protection. This over billion-dollar settlement represents a mere 31 percent of the drug’s peak sales in 2007, prior to the generic versions of the medicine decreasing the revenue for the drug.

The settlement amount is equal to around 5.6 percent of Risperdal’s cumulative sales since 2003.

In 1993, the FDA approved this drug for patients with psychotic disorders like schizophrenia, which only accounts for around 2.4 million Americans. So, the companies Janssen unit attempted to broaden their client base by marketing the drug for patients with dementia, bipolar disorder, mood and anxiety disorders and other unapproved uses.

The drug was later approved for other medical uses; however, that did not change the fact the company did the marketing prior to receiving approval. According to a SEC filing in May, the pharmaceutical company placed funds in a reserve in order to resolve the government’s claims over the medication.

Source: Johnson & Johnson 1 Billion Risperdal