As Johnson & Johnson and the state of Arkansas start airing their arguments over Risperdal marketing, the company is going back to court in Texas, where it agreed to pay $158 million to settle a similar case. The states both alleged that J&J ($JNJ) pushed Risperdal for off-label use and downplayed the drug's risks, inducing Medicaid to spend far more on the drug than it otherwise would have.
J&J isn't saying why the Texas settlement agreement has come up for a new hearing, and that state's attorney general, Greg Abbott, professes ignorance. The whistleblower who first brought the suit, however, says the drugmaker wants to reduce his and his attorneys' share of the deal. "As far as we knew, we had a solid settlement," said Tom Kelley, the AG office's spokesman (as quoted by Reuters). "We'll have more information on Tuesday about what has caused (Johnson & Johnson) some concerns."
Meanwhile, in Arkansas, that state's case was scheduled to hit court today, and the Arkansas Democrat-Gazette pegs possible damages at up to $1 billion, the same figure bandied about before the Texas trial ended in a settlement (and it should be noted that Texas' Medicaid program is larger than Arkansas'). The company was said to be in talks with Arkansas AG Dustin McDaniel's people, but those negotiations ended Friday without a deal.
Both Texas and Arkansas are among the states that elected to go it alone in fighting J&J over Risperdal-related Medicaid claims. A slate of others joined up with the feds. A tentative settlement had been reached in that case--of around $1 billion--but the Justice Department ended up rejecting that deal. Officials want to push for a much higher amount, perhaps as much as $1.8 billion, according to media reports. One sticking point may be the size of Texas' settlement: The states involved in the broader negotiations may be holding out for settlement money in line with that figure.
- read the Reuters news
- check out the Philadelphia Inquirer's blog post