J&J hit with $1.1 billion Risperdal penalty in Arkansas

(Reuters) - An Arkansas state judge has ordered Johnson & Johnson to pay a $1.1 billion penalty after a jury found the company guilty of using fraudulent tactics to sell its Risperdal anti-psychotic medicine.

Arkansas sued the diversified healthcare company, saying it had deceived thousands of doctors in the state by touting the one-time blockbuster medicine as better and safer than rival therapies and marketing it for unapproved uses in children and the elderly.

The state alleged the company had caused its Medicaid insurance program for the poor to greatly overpay for Risperdal.

Following a two-week trial in Pulaski County Circuit Court in Little Rock, a jury on Tuesday found that J&J had marketed the drug inappropriately. Judge Tim Fox handed down the $1.1 billion penalty on Wednesday.

“We are disappointed with the judge’s decision on penalties,” said J&J spokeswoman Teresa Mueller, who confirmed the award. She said J&J would appeal the award if the company’s motion for a new trial is denied.

A clerk for Judge Fox declined to provide details from his decision, saying it had not yet been formally filed with the court.

J&J in January said it would pay $158 million to settle a Texas lawsuit accusing it of improperly marketing Risperdal to patients in that state’s Medicaid program, and similar lawsuits are pending in a number of other states. The Texas settlement fully resolved claims in that state but did not affect other state and federal Risperdal litigation.

The U.S. Department of Justice for years has been investigating allegations that J&J marketed Risperdal for unapproved uses, including for nursing home residents. Federal prosecutors in Washington, D.C., earlier this year nixed a tentative $1 billion settlement with J&J, holding out for a bigger settlement with the drugmaker, according to published reports.

J&J shares were off 6 cents at $64.14 in afternoon trade

Reporting By Ransdell Pierson and Lewis Krauskopf in New York; Editing by Lisa Von Ahn and John Wallace