Court Ruling Clears Way for Jury Trial in $1 Billion Texas Medicaid Whistleblower Lawsuit

Fri Mar 4, 2011 2:50pm EST

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  AUSTIN, TX, Mar 04 (MARKET WIRE) -- 
A recent state district court ruling has cleared the way for a jury to
hear claims filed by the State of Texas and plaintiff Allen Jones based
on allegations that pharmaceutical manufacturer Janssen L.P. used false
marketing tactics to convince state officials to spend millions on a
schizophrenia drug.

    The ruling was issued late Thursday, March 3, 2011, in Judge John Dietz'
250th District Court in Travis County following summary judgment motions
filed by both the State of Texas and Janssen, a division of New
Brunswick, N.J.-based Johnson & Johnson (NYSE: JNJ).

    The original complaint was filed in 2004 based on evidence uncovered by
Mr. Jones during his work as an investigator with the Pennsylvania
Inspector General's Office. The lawsuit says Janssen engaged in a
systematic and wide-ranging scheme to convince state Medicaid officials
to give preferential treatment to the company's Risperdal schizophrenia

    The drug was no better and no safer despite being substantially more
expensive than older medications that treat the same illness, the lawsuit
alleges. Janssen worked to build revenue by actively and purposefully
marketing the powerful antipsychotic drug for use in children, the
lawsuit says, even though the medication was approved only for the very
narrow purpose of treating adult schizophrenia. In the years since
Risperdal was first introduced, Texas has paid more than $500 million for
the drug.

    In the order issued in The State of Texas, ex rel Allen Jones v. Janssen,
L.P., et al., No. D-1-GV-04-001288, the Court ruled against Janssen on
two motions that would have ended the case, and ruled in favor of the
state on three summary judgment motions.

    "We are very pleased that a Texas jury finally will be able to scrutinize
Janssen's actions, which we allege have unfairly cost the state's
taxpayers hundreds of millions of dollars for a drug that was no better
than older, cheaper medicines," says Dallas attorney Tom Melsheimer, who
represents Mr. Jones with Austin attorney Tommy Jacks. "The defendants
fought tooth-and-nail to keep this case from a jury, and that effort has

    The defendants' total exposure in the anticipated jury trial, currently
set for June 21 in Austin, exceeds $1 billion, including damages,
penalties, and other potential liabilities, Mr. Melsheimer says. 


For more information, contact 
Bruce Vincent 

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