The Dallas Morning News
By Janet Elliott and Mark Curriden
January 8, 2012

AUSTIN — A routine inquiry a decade ago by an investigator for the Pennsylvania inspector general exposed a pattern in which pharmaceutical companies showered trips, meals and other perks on state officials in positions to influence which drugs would be used to treat patients under Medicaid.

The efforts appeared to have been particularly successful in Texas, which has one of the largest Medicaid populations.

In 2004, Allen Jones, a whistle-blower who worked with the Pennsylvania inspector general, filed suit alleging that pharmaceutical giant Johnson & Johnson improperly marketed its antipsychotic drug Risperdal for unapproved uses while funneling money to members of a state panel charged with recommending drug treatments for those in state health programs.

Two years later, Texas Attorney General Greg Abbott joined the lawsuit, seeking hundreds of millions of dollars in damages.

The case has been described by lawyers as the biggest lawsuit in Texas since the tobacco litigation in the 1990s. It goes to trial Monday in state court in Austin.

The high-stakes lawsuit alleging Medicaid fraud seeks $579 million in damages from Janssen, a division of New Jersey-based Johnson & Johnson, and penalties that could exceed an additional $500 million. The federal government will get half of any money recovered in the case, and Jones could receive between 10 and 25 percent.

The Texas case is separate from a reported $1 billion settlement reached just last week between Johnson & Johnson and others states over the marketing of Risperdal.

Risperdal was among antipsychotic drugs introduced in the 1990s. Initially approved for adults with schizophrenia, it soon became widely used in Texas mental hospitals and prisons for “off-label” uses, including for youths in the state’s foster care system.

“Not only was Risperdal not more effective, its risks were worse than its competitors and it was 45 times more expensive,” said Tom Melsheimer, a partner at Fish & Richardson in Dallas who represents the whistle-blower. “The company’s claim that its product was superior and its off-label promotional efforts were not supported by science.”

What did support Janssen’s promotional efforts were influential decision makers — including state employees, University of Texas faculty and mental health advocates — who received consulting fees, extravagant meals and travel accommodations, research funding and honoraria, according to the lawsuit.

Janssen denies that it misrepresented Risperdal and rejects allegations that its marketing efforts inflated the state’s spending on the drug. In court filings, the drug company points to the state’s continued use of Risperdal since joining the whistle-blower’s case in 2006.

Follow the money

In the 2010 fiscal year, Texas spent $15.016 million on Risperdal and $13.275 million on its generic equivalent for patients enrolled in Medicaid and the Children’s Health Insurance Program. The drugs cost an average of $229 per prescription, a 2006 Texas comptroller’s report said.

The program known as the Texas Medication Algorithm Project, or TMAP, started in the mid-1990s when state mental health officials contracted with the University of Texas and some of its professors to evaluate medications for treating mental illnesses and disorders.

Jones and the state allege that a process designed to be based on independent experts was co-opted by Janssen using false and misleading information, including ghostwritten articles and industry-funded studies, while playing down side effects, including weight gain and diabetes.

“Defendants thus ‘seeded the literature’ and increased the ‘noise level’ in the Texas health care community, including the Texas Medicaid community, with their false and misleading tale of Risperdal’s superiority to other antipsychotics and suitability for off-label use on vulnerable populations,” the state says in its most recent filing in the case.

Janssen is prepared to vigorously defend itself against these claims, spokeswoman Teresa Mueller said in emailed statement.

“We are committed to ethical business practices, and have policies in place to ensure that our products are only promoted for their FDA-approved indication,” Mueller said. “If questions are raised about adherence to our marketing and promotion policies, we act quickly to investigate the situation and take appropriate disciplinary action.”

Before the marketing blitz, the market was limited for Risperdal, Melsheimer said.

“Janssen determined in 1993 that the market for this drug was the 1 percent of adults with diagnosed schizophrenia, which was a $1 billion market,” he said. “So, the company created a new market for the drug. They created the perception that the drug was a breakthrough for expanded off-label treatments. As a result, the revenue generated by the sale of Risperdal jumped to $34 billion between 1997 and 2010.”

Fees, meals and trips

The most sensational allegations involve Janssen’s use of inducements, including consulting fees, meals, travel accommodations, research funding and honorariums. A key target was Dr. Steven Shon, medical director of the Texas Department of Mental Health and Mental Retardation. Records filed in the case show that Shon received $30,000 in fees and honoraria as a frequent speaker at Johnson & Johnson-sponsored events around the U.S.

David Rothman, a Columbia University professor who studies relations between medicine and the pharmaceutical industry, said in a report that Shon’s conduct was an “acute conflict of interest.” Shon, who resigned in October 2006, said in a deposition that he did not believe he influenced the placement of drugs on TMAP because he was an administrator and not a decision maker in the TMAP process.

Another potential witness in the case is M. Lynn Crismon, dean of the University of Texas College of Pharmacy. Crismon was a professor and member of the TMAP advisory panel in the mid-1990s when he “cultivated a financial relationship with J&J, accepting substantial fees and honoraria and soliciting research grants from the company,” according to Rothman’s report. “As a result, Dr. Crismon subverted the scientific integrity of his research and educational presentations, and biased his decision-making capacity as a member of TMAP.”

Crismon did not respond to a request for comment.

Jury selection is expected to take one day, with opening statements starting Tuesday. The trial could last four weeks.

Read article here:  http://www.dallasnews.com/business/health-care/20120108-texas-ag-suit-over-the-drug-risperdal-goes-to-trial-monday.ece