South Carolina v. Janssen Pharmaceutica, scheduled to begin February 14 in Spartanburg, South Carolina, will be the third jury trial involving claims that Johnson & Johnson overcharged for its antipsychotic drug Risperdal (generically known as "Risperdone"). South Carolina's alleged Medicaid overcharge damages are said to run into the billions.
Pennslyvania asserted a simlar claim, but the case was dismissed in June, 2010, after the state had presented its evidence to a jury. But in Louisiana a jury awarded $257M against Johnson & Johnson last October, and in 2009 a West Virginia judge awarded $4.4M in damages. Several other states' Risperdal claims are still pending, including Arkansas, Montana, New Mexico, Texas, and Utah.
In its complaint, South Carolina conceded that it had no practical means of ensuring that every Risperdal prescription was medically necessary, and "thus relies on persons receiving payment and benefits to turn square corners in their dealings with Medicaid" and state reimbursement programs. However, Janssen Pharmaceutica had "aggressively exploited this loophole" (1) by promoting Risperdal for non-medically acceptable and non-medically necessary uses, and (2) by falsely representing to the State that Risperdal was safer and more effective than less expensive first-generation antipsychotics. In addition, South Carolina sought to recover the cost of treating South Carolina citizens who were injured by inadequately disclosed Risperdal risks.
Risperdal was introduced by Janssen in 1994, and by 2005 generated annual revenues in excess of $3.5B. "Crucial to this blockbuster success," said South Carolina, was Janssen's "aggressive marketing of Risperdal, which consisted chiefly of overstating the drug's efficacy, while concealing its life-threatening effects."