When the Justice Department nixed Johnson & Johnson's ($JNJ) tentative Risperdal settlement, it wasn't kidding. Higher-ups apparently were far from satisfied with the proposed $1 billion deal, which would have wrapped up years of investigation into the company's marketing practices. In fact, Bloomberg reports, the Justice Department wasn't swayed by a J&J offer to boost the settlement to $1.3 billion.
The feds want $1.8 billion instead.
Or so Bloomberg's sources say. They tell the news wire that officials demanded more after both the Justice Department and the states that would be part of the settlement deemed the $1 billion amount inadequate. The negotiations are ongoing.
Apparently, the recent $158 million settlement of Texas' Risperdal marketing claims--which weren't part of the $1 billion tentative deal--emboldened other states to ask for more. "Considering how much money the State of Texas got, it makes sense for the DOJ to push back for a significantly higher number," Patrick Burns of Taxpayers Against Fraud told the news service. "Washington can do the math."
One source said that the Justice Department expects to announce a deal in May. That gives J&J and government officials a couple of months to come to an agreement. The company has set aside funds to cover the settlement, but hasn't said how much. If the Justice Department gets its way--and its $1.8 billion price--the Risperdal deal would fall between Pfizer's ($PFE) $2.3 billion off-label marketing settlement and Eli Lilly's ($LLY) $1.4 billion hit.
- read the Bloomberg news