Janssen Pharmaceuticals Inc., a subsidiary of Johnson & Johnson, will pay $158 million to settle litigation filed by the state of Texas and a whistle-blower over allegedly false marketing of the antipsychotic drug Risperdal for Medicaid patients. The settlement announced today by Janssen ends a trial that began on Jan. 9 with jury selection in 250th District Judge John Dietz's court in Travis County. Janssen announced it will pay $158 million in “full resolution” of all claims in Texas. “This settlement represents a resolution to claims brought by the State in 2004 for alleged Medicaid overpayment during the years 1994-2008,” Janssen wrote in a press release, which it provided in response to a telephone call seeking comment from Johnson & Johnson. State of Texas, et al. v. Janssen LP, et al. stemmed from a whistle-blower suit that plaintiff Allen Jones filed under seal in 2004, the Texas Attorney General’s Office wrote in a press release. In the Plaintiffs’ Fifth Amended Petition, the state and Jones alleged the defendants, a group of related Johnson & Johnson companies, worked together to market Risperdal. The plaintiffs alleged the defendants falsely marketed Risperdal and violated the Texas Medicaid Fraud Prevention Act. In the written statement, Janssen wrote that it is “committed to ethical business practices.” The settlement money will go to Jones and his attorneys, the state of Texas and the federal government, which provided Medicaid reimbursements to the state, Janssen wrote in the press release. Tom Melsheimer (pictured), a shareholder in Fish & Richardson in Dallas who represents Jones, says, “We’re thrilled with the settlement. This settlement is the largest Medicaid fraud settlement in Texas by almost a factor of two.” Melsheimer says settlement negotiations had been ongoing during the trial, but talks “sped up” at the conclusion of court proceedings yesterday. He says they reached a deal late last night and informed the judge of the settlement this morning. Melsheimer says his client, a former employee of the Office of the Inspector General in Pennsylvania, could receive up to 25 percent of the settlement, after paying attorneys’ fees and expenses, but the split of the money hasn’t been decided. In a statement today, Texas Attorney General Greg Abbott writes that the settlement “sends a strong message.” Abbott was not immediately available for comment. Defense attorney Stephen McConnico, a partner in Scott, Douglass & McConnico in Austin who gave the opening statement at the trial, did not immediately return a telephone message seeking comment. The defendants — all represented by McConnico — include Janssen, Johnson & Johnson, and five other related Johnson & Johnson companies.
-- Brenda Sapino Jeffreys