Jury Reaches Verdict in South Carolina Attorney General's Lawsuit Against Johnson & Johnson

Yesterday I posted an update about the South Carolina Attorney General's lawsuit against Johnson & Johnson and how the case went to the jury for deliberation (and the link to that post is here). The same reporters who provided news coverage about the closing arguments posted another article late yesterday that the jury reached a verdict, and their conclusion was that Johnson & Johnson violated South Carolina's consumer protection laws by sending South Carolina doctors a misleading letter about the safety and effectiveness of the anti-psychotic drug Risperdal.

A link to the article can be found here, and a cut and paste of it is below. (Thanks again to Bloomberg.com and these reporters for the coverage).

J&J’s Risperdal Letter Violated Consumer Law, Jury Finds

By Jef Feeley and Gary Henderson - Mar 22, 2011 7:23 PM ET

A Johnson & Johnson (JNJ) unit violated consumer-protection laws by sending South Carolina doctors a misleading letter about the safety and effectiveness of the antipsychotic drug Risperdal, a jury concluded.

Jurors in state court in Spartanburg, South Carolina, deliberated more than six hours before finding today that J&J’s Ortho-McNeil-Janssen Pharmaceuticals unit engaged in “unfair and deceptive acts” by sending a 2003 letter touting Risperdal as better and safer than competing drugs to more than 7,000 doctors across the state. A judge will decide later whether the drugmaker should pay $360 million in penalties over the mailings.

“The verdict they handed down is just and speaks the truth,” John White, a Spartanburg-based lawyer representing the state, said in an interview. Jurors also found that J&J warning label information on Risperdal was deceptive.

The state’s case centered on drug-safety claims that New Brunswick, New Jersey-based J&J and Janssen made in November 2003 correspondence to about 700,000 doctors across the U.S., including 7,200 in South Carolina.

The U.S. Food and Drug Administration responded with a warning letter saying J&J made false and misleading claims that minimized the potentially fatal risks of diabetes and overstated the drug’s superiority to competitors’ products.

‘Acted Responsibly’

“We are disappointed,” Greg Panico, a J&J spokesman, said in a statement. “Janssen acted responsibly and believes it did not violate” South Carolina law, he said.

South Carolina officials argued in the case that J&J sent the letter to protect billions of dollars in sales of the antipsychotic drug.

Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. Risperdal generated $3.4 billion in sales in 2008, or 5.4 percent of J&J’s total sales, according to company filings. Sales of the drug fell to $527 million last year, J&J said in a January earnings report.

Risperdal Consta, the long-acting version of the antipsychotic drug, generated $1.5 billion in sales last year for J&J.

The case is the third of about 10 state lawsuits to be considered by jurors over J&J’s Risperdal marketing campaigns. In June, J&J won dismissal of Pennsylvania’s suit alleging the company hid the drug’s diabetes risk and tricked regulators into paying millions more than they should have for the medicine.

Louisiana Verdict

A Louisiana jury ordered the drugmaker in October to pay $257.7 million in damages to that state for making misleading claims about Risperdal’s safety. A judge later added $73 million in legal fees to the award.

A West Virginia judge in a 2009 non-jury trial awarded $3.95 million, finding the company misled doctors about the risks and benefits of Risperdal. The state dropped its Risperdal claim after J&J won an appeal, company officials said in February.

Under South Carolina’s unfair trade practices law, Janssen can be fined as much as $5,000 for each Risperdal letter sent to South Carolina doctors. Judge Roger Couch will decide the financial-penalty issue after an April 18th hearing.

“After the judge makes a determination as to damages, we will consider our options,” Panico said in his statement.

The case is State of South Carolina v. Janssen Pharmaceuticals, 2007-CP-4201438, Circuit Court for Spartanburg County, South Carolina (Spartanburg).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net ; Gary Henderson in Spartanburg, South Carolina at wgaryh@gmail.com .

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net .

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Reminder: 2011 DRI Products Liability Conference Coming Up April 6-8, 2011

I previously posted all of the information about the upcoming 2011 DRI Products Liability Conference here, and I have been asked to post a reminder since we are only a couple of weeks away.

The Defense Research Institute is holding their Products Liability Conference at the Hilton New Orleans Riverside in New Orleans, Louisiana this year from Wednesday, April 6 through Friday, April 8, 2011. This is a great conference. I went to the one last year that was in Las Vegas, and I am attending this year's conference. In fact, I will be presenting on Thursday at one of the Specialized Litigation Group ("SLG") breakout sessions. I joined the "Agricultural/Construction/Mining/Industrial Equipment" ("ACMIE") SLG last year, and this year I am doing a presentation entitled "Who Needs Letterman? The Annual ACMIE Top 10 Cases." As the title suggests, the presentation is basically a survey of significant cases in 2010 that involved ACMIE products and equipment (and if you know of a case that I should consider for inclusion, please comment so that I can get in touch and discuss it with you).

All the details for the conference, including a brochure of the agenda, registration, etc., can be found here. I'm flying in Tuesday for the networking reception that evening, and I look forward to seeing anyone else who will be there.

Update: South Carolina Attorney General's Lawsuit Against Johnson and Johnson to Begin Jury Deliberations

This is an update to the post below in which I provided an article about the beginning of the South Carolina Attorney General's lawsuit against Johnson & Johnson about the drug Risperdal. According to the article below written by Jef Feeley and Gary Henderson, the jury will begin deliberations in the trial today. The article is a good account of the closing arguments during trial, and the direct link to the article is here. (Thanks to Bloomberg.com for the coverage).

J&J Duped South Carolina Doctors Over Risperdal, Lawyer Says

By Jef Feeley and Gary Henderson - Mar 21, 2011 5:38 PM ET

Johnson & Johnson executives deceived South Carolina doctors about the safety of the antipsychotic drug Risperdal, and the drugmaker should be held liable for that deception, a lawyer said.

J&J made misleading claims about Risperdal’s health risks and effectiveness in a letter to more than 7,000 South Carolina doctors and that violated consumer protection laws, John Simmons, a lawyer for the state, said in closing arguments of the trial of a lawsuit seeking at least $360 million in penalties.

The drugmaker, based in New Brunswick, New Jersey, used “unfair and deceptive acts” in a marketing campaign designed to dupe doctors into signing off on Risperdal for mental-health patients, Simmons told jurors today.

The state’s case centers on drug-safety claims that J&J and its Ortho-McNeil-Janssen Pharmaceuticals unit made in November 2003 correspondence to 700,000 doctors across the U.S., including 7,200 in South Carolina. The U.S. Food and Drug Administration responded with a warning letter saying J&J made false and misleading claims that minimized the potentially fatal risks of diabetes and overstated the drug’s superiority to those from competitors.

J&J contends the state hasn’t proved the company set out to mislead doctors about Risperdal or started a “spin campaign” to bolster sales of the drug, Steven J. Pugh, one of the drugmaker’s lawyers, said in his closing statement.

Fall in Sales

South Carolinians with mental-health issues “have benefited from Risperdal,” Pugh said. “You haven’t heard that anyone in South Carolina has been harmed by Risperdal.”

Risperdal’s global sales peaked at $4.5 billion in 2007 and declined after the company lost patent protection. It generated $3.4 billion in sales in 2008, or 5.4 percent of J&J’s total sales, according to company filings. Sales of the drug fell to $527 million last year, according to a January earnings report.

Risperdal Consta, the long-acting version of the antipsychotic drug, generated $1.5 billion in sales last year for Johnson & Johnson (JNJ), officials said this month.

Under South Carolina’s unfair trade practices law, if jurors decide Johnson & Johnson deceived doctors about Risperdal in the 2003 letter, the company can be fined as much as $5,000 for each letter. Judge Roger Couch will decide the financial- penalty issue after jurors hand down their decision.

Third Jury Trial

The case is the third of about 10 state lawsuits to be considered by jurors over J&J’s Risperdal marketing campaigns. In June, J&J won dismissal of Pennsylvania’s suit alleging the company hid the drug’s diabetes risk and tricked regulators into paying millions more than they should have for the medicine.

A Louisiana jury ordered the drugmaker in October to pay $257.7 million in damages to that state for making misleading claims about Risperdal’s safety. A judge later added $73 million in legal fees to the award.

A West Virginia judge in a 2009 non-jury trial awarded $3.95 million, finding the company misled doctors about the risks and benefits of Risperdal. The state dropped its Risperdal claim after J&J won an appeal, company officials said in February.

J&J’s Risperdal letter to doctors was part of a campaign to protect billions of dollars in sales of the antipsychotic drug and showed a lack of concern for the safety of South Carolina patients who took the drug, Simmons said.

The drugmaker set up a “spin machine” to deceive doctors about the drug and hid studies casting doubt on the medication’s safety and effectiveness, the lawyer said. “It was all about the money,” he added.

‘Send a Message’

“You have the power to send a message to these companies that you can’t hide stuff,” Simmons said. “Tell them, no unethical, immoral conduct in South Carolina.”

The Risperdal letter in the state’s crosshairs isn’t a proper basis for the attorney general’s claims that the drugmaker violated consumer-protection laws, Pugh countered.

The FDA warned J&J in 2004 to correct some things in the letter, but never formally sanctioned the drugmaker for sending it out, the lawyer added.

“The November 2003 letter was true then and it’s true now,” Pugh said. Risperdal is different from other antipsychotic medicines and “doctors needed to know that,” he added.

Jurors will begin deliberating the case tomorrow.

The case is State of South Carolina v. Janssen Pharmaceuticals, 2007-CP-4201438, Circuit Court for Spartanburg County, South Carolina (Spartanburg).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net Gary Henderson in Spartanburg, South Carolina at wgaryh@gmail.com.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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South Carolina Attorney General's Lawsuit Against Johnson and Johnson

Apparently the State's lawsuit against Johnson and Johnson began yesterday. Stephen Largen at the Spartanburg Herald Journal ran the below article yesterday, and you can find the direct link here. A cut and paste of it is below. This lawsuit sounds a good bit like the one against Eli Lilly, which I blogged about here and here awhile back. It includes allegations of off-label promotion and overcharging. I will try to keep my eyes out for coverage of the trial in the papers.

SC's lawsuit vs. Johnson & Johnson goes to trial

By Stephen Largen
stephen.largen@shj.com

Published: Tuesday, March 8, 2011 at 3:15 a.m.
Last Modified: Monday, March 7, 2011 at 9:58 p.m.

Nearly four years after the state of South Carolina first sued Johnson & Johnson over claims a subsidiary company overcharged the state for an antipsychotic drug and hid the risk of its side effects, the trial will begin this morning in 7th Judicial Circuit Court.

A jury, which will decide liability in the case but leave the awarding of any potential monetary damages to Judge Roger Couch, was seated Monday.

The S.C. Attorney General’s Office claims in its lawsuit that J&J’s Titusville, N.J.-based Janssen unit improperly marketed the drug Risperdal for unapproved uses, including treating children and dementia patients, dramatically overcharged the state for the drug, and did not adequately disclose the risk to patients of diabetes and other side effects.

A lawsuit represents only one side of a legal argument.

The S.C. Department of Health and Human Services paid about $10 million annually for a decade to provide the drug for Medicaid recipients.

Risperdal hit the market in 1994, and by 2008 generated $3.4 billion in sales.

Attorneys for the state aim to prove that the massive sales figures were due in large part to aggressive, deceptive marketing.

Two other states that made similar claims against J&J have won monetary awards, while another had its case dismissed.

Last fall, Louisiana was awarded $257 million in damages. Two years ago, West Virginia was awarded $4.4 million.

Pennsylvania had its case dismissed last summer.

Several other states have pending Risperdal claims against J&J.

South Carolina filed a similar fraudulent-marketing lawsuit against drugmaker Eli Lilly related to the marketing of its antipsychotic drug Zyprexa, and it settled with the company for $45 million in 2009.

The state’s representation in the J&J case includes attorneys who worked on the Eli Lilly case and Risperdal cases in other states.

The Risperdal trial is scheduled to open at 9 a.m. today. The trial is expected to last three weeks.

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Voila!

The kind people in the marketing and IT departments here at Collins & Lacy, P.C. have been helping me with a "bold, fresh new look." I am not sure how "bold" or "fresh" a legal blog can be, but we strive for excellence here at the South Carolina Products Liability Law Blog. I hope you enjoy the updated look, and comments are always welcome. I am also going to add a new blogroll and update some links, so check in from time to time.

More on the Legislative Amendment to Overturn Branham v. Ford

I wanted to provide an update on the post below concerning the proposed amendment to reverse the holding in Branham v. Ford. Admittedly, I was not at the hearing in question, and all the information I had at the time of my post was through the grapevine and from the article in the South Carolina Chamber of Commerce Update. Since my post, I have learned that the bill in question is H.B. 3375, which is entitled the "South Carolina Fairness in Civil Justice Act of 2011." At the hyperlink, you can find the various versions of the bill, by date. The version with the amendment in question is here, which is the committee report from February 23, 2011.

As you read through it, you are not going to find language that says "hey, this is the part that reverses Branham v. Ford." Instead, the amendment is more subtle. It strikes Sections 15-73-10, 20 and 30 of the South Carolina Code and adopts identical Sections 15-73-11, 21 and 31. My understanding is that the expressed purpose of the amendment was to overturn Branham. I am told that at the hearing, it was stated that the Branham case stood for the principle that if the Legislature did not actively renew a statue after a number of years, the Supreme Court felt it was empowered to overturn statutory authority and to adopt a rule of law directly contrary to the statute. Therefore, the amendment is to "renew" the statutory authority. The amendment re-adopts the comments to Section 402A of the Restatement (Second) of Torts as new Section 15-73-31.

My brief of Branham discusses how the South Carolina Supreme Court addressed the evolution of products liability law since incorporation of comment 402A into the statute, including the Restatement (Third) of Torts: Products Liability in 1998. The Restatement (Third) and the majority of jurisdictions have evolved toward the risk-utility test for design defect cases, and South Carolina's appellate courts have also gravitated toward this test over the years. Therefore, it makes sense to adopt it as the test for design defect cases. I do not read Branham as some sort of judicial slap to the face of the statutory authority or the Legislature. Rather, it is an attempt to keep South Carolina current in products liability law. However, I welcome reader comments.

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