U.S. wants more than $1B from J&J in Risperdal settlement

Johnson & Johnson ($JNJ) may have thought it had its Risperdal marketing problems almost wrapped up. But it was wrong. As The Wall Street Journal reports, Justice Department higher-ups have rejected a $1 billion settlement negotiated by prosecutors in Philadelphia. The Washington officials want a larger deal.

The tentative settlement had been designed to resolve a probe of J&J's Risperdal marketing practices. The long-running investigation focused on potential off-label marketing of the antipsychotic drug and another psychopharmaceutical, Invega, the WSJ reports. The deal would have included civil and criminal fines, plus a misdemeanor guilty plea.

Lately, Justice Department prosecutors have been ratcheting up the rhetoric around off-label marketing settlements. Earlier this month, a Health and Human Services official expressed frustration with some companies' repeat violations--and said the government might turn to new punishments to help deter misbehavior.

At around $1 billion, the J&J deal wouldn't be record-setting; Pfizer ($PFE) agreed to pay $2.3 billion to wrap up off-label marketing allegations involving Bextra and a basket of other drugs, while Eli Lilly's ($LLY) Zyprexa settlement amounted to $1.4 billion. The WSJ's sources say Justice wants to up J&J's deal to about $1.4 billion, putting it on par with the Zyprexa deal.

- read the WSJ piece