Bloomberg Business Week – March 23, 2011

By Jef Feeley and Gary Henderson

Johnson & Johnson executives deceived South Carolina doctors about the safety of the antipsychotic drug Risperdal, and the drugmaker should be held liable for that deception, a lawyer said.

J&J made misleading claims about Risperdal’s health risks and effectiveness in a letter to more than 7,000 South Carolina doctors and that violated consumer protection laws, John Simmons, a lawyer for the state, said in closing arguments of the trial of a lawsuit seeking at least $360 million in penalties.

The drugmaker, based in New Brunswick, New Jersey, used “unfair and deceptive acts” in a marketing campaign designed to dupe doctors into signing off on Risperdal for mental-health patients, Simmons told jurors today.

The state’s case centers on drug-safety claims that J&J and its Ortho-McNeil-Janssen Pharmaceuticals unit made in November 2003 correspondence to 700,000 doctors across the U.S., including 7,200 in South Carolina. The U.S. Food and Drug Administration responded with a warning letter saying J&J made false and misleading claims that minimized the potentially fatal risks of diabetes and overstated the drug’s superiority to those from competitors.

J&J contends the state hasn’t proved the company set out to mislead doctors about Risperdal or started a “spin campaign” to bolster sales of the drug, Steven J. Pugh, one of the drugmaker’s lawyers, said in his closing statement.

Fall in Sales

South Carolinians with mental-health issues “have benefited from Risperdal,” Pugh said. “You haven’t heard that anyone in South Carolina has been harmed by Risperdal.”

Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. It generated $3.4 billion in sales in 2008, or 5.4 percent of J&J’s total sales, according to company filings. Sales of the drug fell to $527 million last year, according to a January earnings report.

Risperdal Consta, the long-acting version of the antipsychotic drug, generated $1.5 billion in sales last year for Johnson & Johnson, officials said this month.

Under South Carolina’s unfair trade practices law, if jurors decide Johnson & Johnson deceived doctors about Risperdal in the 2003 letter, the company can be fined as much as $5,000 for each letter. Judge Roger Couch will decide the financial- penalty issue after jurors hand down their decision.

Third Jury Trial

The case is the third of about 10 state lawsuits to be considered by jurors over J&J’s Risperdal marketing campaigns. In June, J&J won dismissal of Pennsylvania’s suit alleging the company hid the drug’s diabetes risk and tricked regulators into paying millions more than they should have for the medicine.

A Louisiana jury ordered the drugmaker in October to pay $257.7 million in damages to that state for making misleading claims about Risperdal’s safety. A judge later added $73 million in legal fees to the award.

A West Virginia judge in a 2009 non-jury trial awarded $3.95 million, finding the company misled doctors about the risks and benefits of Risperdal. The state dropped its Risperdal claim after J&J won an appeal, company officials said in February.

J&J’s Risperdal letter to doctors was part of a campaign to protect billions of dollars in sales of the antipsychotic drug and showed a lack of concern for the safety of South Carolina patients who took the drug, Simmons said.

The drugmaker set up a “spin machine” to deceive doctors about the drug and hid studies casting doubt on the medication’s safety and effectiveness, the lawyer said. “It was all about the money,” he added.

‘Send a Message’

“You have the power to send a message to these companies that you can’t hide stuff,” Simmons said. “Tell them, no unethical, immoral conduct in South Carolina.”

The Risperdal letter in the state’s crosshairs isn’t a proper basis for the attorney general’s claims that the drugmaker violated consumer-protection laws, Pugh countered.

The FDA warned J&J in 2004 to correct some things in the letter, but never formally sanctioned the drugmaker for sending it out, the lawyer added.

“The November 2003 letter was true then and it’s true now,” Pugh said. Risperdal is different from other antipsychotic medicines and “doctors needed to know that,” he added.

Jurors will begin deliberating the case tomorrow.

Read the rest of the article here: http://www.businessweek.com/news/2011-03-21/j-j-duped-south-carolina-doctors-over-risperdal-lawyer-says.html