High court won’t hear appeal over $124M drug penalty in SC

COLUMBIA, S.C. (AP) – The U.S. Supreme Court said Monday that it would not hear an appeal from a Johnson & Johnson subsidiary assessed more than $124 million in penalties for deceptive marketing of an anti-psychotic drug.

The justices opted to let stand a lower court ruling that said Janssen Pharmaceuticals, Inc. should pay the penalties for violations of South Carolina law.

In 2011, a state trial court ordered the drug maker to pay $327 million, saying Janssen broke the law by downplaying to doctors the links between diabetes and Risperdal and by improperly claiming the drug was safer than competing medications like Eli Lilly & Co.’s Zyprexa.

Circuit Judge Roger Couch assessed a $300 penalty per sample box of the drug that was distributed. He also assessed a $4,000 penalty per publication of the “Dear Doctor” letter, writing that Janssen knew Risperdal was associated with health problems but intentionally hid studies to that effect, instead telling doctors their drug led to lower incidence of diabetes and weight gain than a competing medicine.

That total penalty was the largest drug marketing award in state history and the largest penalty levied for violations of the South Carolina Unfair Trade Practices Act.

Company attorneys argued the award should be overturned, saying Janssen meant no harm and hurt no one. The high court ultimately reduced the penalty to about $124 million because of the state’s three-year statute of limitations on such cases.

In a statement, Janssen spokeswoman Robyn Frenze said the company was disappointed with the high court’s decision, calling Risperdal “a safe and effective medicine that has helped and is still helping millions of patients with debilitating mental illnesses and neurodevelopmental conditions as part of a comprehensive treatment plan.”

Introduced in 1994 as a “second-generation” anti-psychotic drug, Risperdal is used to treat schizophrenia, bipolar disorder and irritability in autism patients. It earned Johnson & Johnson billions of dollars in sales before generic versions became available.

In 2013, Janssen announced a $181 million settlement with 36 states and the District of Columbia, admitting no wrongdoing, and South Carolina was not part of that deal.

High courts in Arkansas and Louisiana have thrown out judgments against Janssen regarding Risperdal, and similar cases in Pennsylvania and West Virginia were eventually dismissed.

The company agreed to pay $5.9 million to settle a lawsuit with Montana. In December, Kentucky announced a $15.5 million settlement with the company.