SC's top court backs Risperdal verdict against J&J, but cuts penalty to $136M

It's bad news and good news for Johnson & Johnson's ($JNJ) legal department today. South Carolina's Supreme Court upheld a jury verdict against the company in a Risperdal marketing lawsuit, but did slash the $327 million judgment by more than half.

South Carolina Supreme Court Justice John Kittredge

The lawsuit centered on promotional materials J&J's pharma unit Janssen used to market the antipsychotic drug. Key to the case was a letter sent to physicians in the state, which later drew an FDA warning for false and misleading claims. The letter allegedly overstated Risperdal's benefits compared with other drugs in its class and downplayed side effects. The trial court judge ordered Janssen to pay about $4,000 for each of the more than 7,000 letters mailed.

In affirming the judgment against the company, Justice John Kittredge echoed the trial judge's "profit-at-all-costs" characterization of Janssen's marketing efforts. "Janssen's desire for market share and increased sales knew no bounds, leading to its egregious violation of South Carolina law," Kittredge wrote in the Wednesday ruling.

In appealing the original decision, Janssen had argued that the company did not intentionally deceive physicians with its letter. Plus, the state didn't prove patients were actually harmed by the drug, the company contended. The high court partly agreed with the latter point.

"[T]he absence of significant actual harm resulting from Janssen's deceptive conduct leads us to conclude the trial court erred in part in its penalty assessment," Kittredge wrote in the ruling. The penalty was reduced to $136 million.

It's the second court decision in a Risperdal case this week. Tuesday, a Philadelphia jury awarded $2.5 million to a young man who developed breasts while taking the antipsychotic drug. The South Carolina Risperdal case is also one among several state court lawsuits under a variety of consumer protection and fraud laws. After losing at the trial court level, the company successfully appealed a $1.2 billion judgment in Arkansas, and fended off a $257 million judgment in Arkansas.

J&J agreed to pay $2.2 billion in 2013 to settle off-label marketing allegations by the Justice Department and several U.S. states.

- read the Reuters news

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