Johnson and Johnson Settles Texas Risperdal Suit for $158M

By Cynthia Hsu, Esq. on January 25, 2012 | Last updated on March 21, 2019

Health care giant Johnson & Johnson has settled its Medicaid fraud lawsuit in Texas for $158 million.

The company had faced potential fines of up to $1 billion.

The suit centered on the anti-psychotic medication Risperdal. Johnson & Johnson was accused of fraud.

Prosecutors claimed the company made false or misleading statement about the drug's safety, cost, and effectiveness. Johnson & Johnson allegedly also tried to improperly influence health care providers to prescribe the drug.

The company reportedly also marketed the drug to children. This is despite the drug's own labeling which says the medicine's safety and effectiveness in children was not established, according to Bloomberg.

The company sold more than $34 billion worth of Risperdal.

Some believe this multi-million dollar settlement is actually a "win" for the healthcare giant. Johnson & Johnson faced Risperdal lawsuits in other states. There, they paid much higher sums.

The company was ordered to pay $327 million in South Carolina. They were also ordered to pay $258 million in Louisiana.

"The legal team at Johnson & Johnson [is] doing high fives," University of Michigan professor Eric Gordon told the AP.

The suit was started by whistleblower Allen Jones in 2004. The state later joined the lawsuit. The settlement will resolve all claims in Texas. An attorney for Jones said that they were not disappointed with the settlement amount.

Though Johnson & Johnson has settled the Texas case, more Risperdal suits are on the horizon. Bloomberg reports the company is also facing litigation in Alaska, Arkansas, Louisiana, Montana, New Mexico, Pennsylvania, and Utah.

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