Federal Prosecutors Want $1 Billion from J&J

Federal prosecutors are demanding that Johnson & Johnson pay about $1 billion to settle an investigation into whether the company marketed antipsychotic drug Risperdal for unapproved uses. The probe started in 2004 with a subpoena demanding documents on J&J’s sales practices, payments to physicians related to the marketing of Risperdal, and clinical trials related to the drug.

Marketing drugs for unapproved purposes has become more common in past years, as pharmaceutical companies seek to compete with and outsell their rivals. Federal prosecutors allege that J&J illegally encouraged nursing homes to give Risperdal to patients with dementia, a group for whom it may cause death.

In February 2010, the government requested more information on sales and marketing of Risperdal and newer schizophrenia drug Invega. The Department of Justice and the U.S. Attorney in Philadelphia are actively pursuing both criminal and civil actions against J&J.

J&J has set aside a reserve related to the criminal investigation of marketing Risperdal, but did not disclose the amount.

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