J&J close to $1.5B-plus Risperdal settlement, but not there yet

The latest on Johnson & Johnson's ($JNJ) Risperdal settlement: It may not be as close--or as big--as we previously thought. Then again, it could be bigger. The The Wall Street Journal reports that J&J and the Justice Department are coming to terms, aiming to wrap up whistleblower suits, state claims and federal probes with a $1.5 billion-plus deal. The two sides are close--with a settlement possible in a few weeks--but negotiations could still falter.

According to the Journal's sources, J&J would avoid a felony charge; previously, the company had said it agreed on a Risperdal-related misdemeanor plea. But it looks as if the company will end up paying more than it previously thought; the parties are looking at a $1.5 billion to $1.7 billion deal, WSJ says, though some sources put the amount at around $2 billion.

The Risperdal saga has been full of twists and turns, as any long-running investigation tends to be. The feds have been looking into J&J's marketing of the antipsychotic pill since 2004; along the way, several of its Big Pharma rivals inked their own marketing settlements, including Pfizer's ($PFE) $2.3 billion Bextra deal and Eli Lilly's ($LLY) $1.4 billion Zyprexa settlement. Then, in March, J&J and Justice officials were reportedly settled on a $1 billion payment, but higher-ups wanted to hold out for more. And earlier this month, J&J added another $600 milion to its Risperdal legal reserves.

One apparent sticking point: the states' portion of the settlement. The $1 billion deal failed to win approval around the time that J&J settled its differences with the state of Texas for $158 million--and after even larger jury verdicts in favor of South Carolina and Arkansas. Those 9-digit numbers may have whetted the appetites of states involved in the settlement.

- read the WSJ piece
- get the Reuters news