South Carolina Court Cuts J&J’s Risperdal Penalties to $136 Million

The South Carolina Supreme Court more than halved the $327 million in penalties imposed on Johnson & Johnson’s Janssen drug unit by a lower court for hiding the risks of its drug Risperdal, ruling that the penalties levied on the company were excessive.

Justice John Kittredge, in writing for the court, blasted the company: “Janssen’s furtive efforts to mislead prescribing physicians about the risks and side effects associated with Risperdal were reprehensible and in callous disregard for the health and welfare of the public.” However, he said the risks of atypical antipsychotics as a class were well-known to physicians.

The ruling, which slashed $191 million off the civil penalties ordered by the trial court, leaves Janssen facing a $136 million penalty for two claims in the case: that the company knowingly excluded the risks of weight gain, diabetes, heart attack and stroke on Risperdal’s labeling from 1998 to 2007, and that it had lied about those risks in 7,184 Dear Doctor letters mailed to South Carolina physicians in November 2003, as well as in 36,372 sales calls.

The trial court in its 2011 decision imposed a $300 penalty for every sample box of Risperdal (risperidone) that Janssen sent to physicians. The Supreme Court did away with the $300 penalty for sample boxes sent before 2004, citing an expired statute of limitations. It also lowered the post-2004 penalties to $100 per sample box, for a total of $34.5 million.

Janssen also appealed the $4,000 penalty for every Dear Doctor letter, as well as the $4,000 for each follow-up sales call or visit. Kittredge upheld the penalties for the letters, but reduced the sales call penalties to $2,000 per call, for a total of $101.48 million.

Janssen, which maintains that it didn’t violate South Carolina law, is reviewing its legal options, spokeswoman Robyn Reed Frenze said. The case against the company (State of South Carolina v. Janssen Pharmaceuticals) was prosecuted by the attorney general under the South Carolina Unfair Trade Practices Act.

Read the opinion at www.fdanews.com/02-26-15-Risperdaldecision.pdf. — Lena Freund