SC court to hear drug co. appeal over $327M award
A Johnson & Johnson subsidiary is going to South Carolina's Supreme Court later this week to argue why it shouldn't have to pay the state hundreds of millions of dollars for deceptive drug marketing.
On Thursday, attorneys for Janssen Pharmaceutica Inc. — a subsidiary of the New Brunswick, N.J.-based drug manufacturer — plan to challenge a Spartanburg County jury's 2011 decision that Janssen broke the law by writing to thousands of South Carolina doctors, downplaying the links between diabetes and its schizophrenia drug Risperdal, and by improperly claiming the drug was safer than competing medications.
First launched in 1994, the blockbuster anti-psychotic drug lost patent protection in 2008. Johnson & Johnson has said that Risperdal Consta, the long-acting version of the drug, generated $1.4 billion in sales last year.
After the jury's decision, a state judge assessed a $327 million penalty against Janssen, the largest drug marketing award in state history and the largest penalty levied for violations of the South Carolina Unfair Trade Practices Act. Circuit Judge Roger Couch assessed a $300 penalty per sample box of the drug that was distributed and a $4,000 penalty per publication of the "Dear Doctor" letter, writing that Janssen knew Risperdal was associated with health problems but intentionally hid those studies.
In court filings, the company argues the judge didn't let company attorneys argue that its mailings and package inserts about Risperdal weren't intended to be deceptive. It also points out that no one was ever actually harmed because of the marketing information.
"There was no evidence that any South Carolina physician was deceived or was likely to be deceived," attorneys wrote. "There was no evidence that any patient suffered any injury as a result of anything that Janssen did or said."
The drug company also argues that federal authorities had approved the insert information, so a state court shouldn't be allowed to weigh in on the matter. Janssen also said Couch's fine was "grossly disproportional" and violated the company's free speech rights.
In their own appellate briefs, state prosecutors say both the ruling and the penalty amount should stand so that Janssen knows it can't break state law with impunity.
"The State reiterates that the Court should avoid a situation where Janssen considers the penalty nothing more than the cost of doing business in South Carolina," Attorney General Alan Wilson wrote.
Janssen has been litigating throughout the country over its Risperdal marketing, announcing in August a $181 million settlement with 36 states and the District of Columbia. Janssen admitted no wrongdoing, and South Carolina was not part of that deal.
The company is also appealing an Arkansas judge's decision ordering Janssen to pay more than $1.2 billion in fines, as well as a $258 million verdict in Louisiana. Two cases against Janssen in Pennsylvania and West Virginia were eventually dismissed.
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