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J&J Looking at $1.8B To Settle Government Lawsuit Accusing Them of Marketing Drug For Unapproved Uses

New Brunswick's Largest Corporation Under Investigation Since 2004 For Marketing & Sales of Antipsychotic Drug Risperdone
Old Johnson & Johnson Factory
Johnson & Johnson was founded in New Brunswick in 1888 and kept its headquarters in the city as it became a global corporation. NewBrunswickToday.com

NEW BRUNSWICK, NJ - Risperdone was once Johnson & Johnson’s best-selling drug, generating worldwide sales of $24.2 billion from 2003 – 2010.  But the company has since lost patent protection and sales of the drug declined.

Now, Johnson & Johnson faces a demand from the U.S. government that the company pay up to $1.8 billion to settle civil suits against the company for marketing the drug for unapproved uses.  The U.S. Department of Justice had previously rejected a settlement negotiated by the U.S. Attorney's office in Philadelphia for $1 billion.

Now, the DOJ is demanding the company pay up to about $1.8 billion to resolve the claims.  J&J reportedly agreed to pay $1.3 billion, but negotiations are still underway.  The drug, also known by its generic name Risperdal, is an antipsychotic used to treat schizophrenia, bipolar disorder, and autism.

Experts say low dosages of the drug can treat people who suffer these mental illnesses, but the U.S. government has been investigating its maker for the way it marketed and sold the drug since 2004.

According the report in Crain’s New York Business, the company has been under investigation by the federal government for claims that it marketed the drug for unnapproved uses.  Four pharmaceutical companies settled simliar marketing lawsuits related to their antipsychotics, for a grand total of $2.7 billion, according to the report.

J&J was also sued by the attorneys general in twelve states for their marketing of Risperdone, according to the report.  States can either decide to join the federal government’s settlement or pursue their own case.

In Texas, the company went to trial with the state's attorney general over the marketing of the drug. The case was settled at $158 million and this created a stir for several other states that had the same issue with the drug.

A jury in Louisiana said that the company downplayed the drug’s risks and awarded $257.7 million. The same thing happened in South Carolina and J&J ultimately paid $327 million in fines.

According to the report, J&J's filings with the Securities & Exchanges Commission indicate it has set aside funds to resolve the government's claims against the company for Risperdone.