Johnson and Johnson 2014 Annual Report Download - page 72

Four states have remaining claims in litigation related to RISPERDAL®: one claim is on remand in Arkansas; the case in
South Carolina is on appeal; in Kentucky, a trial has been set for April 2016; and in Mississippi, the case has not
progressed to trial. The Company has not accrued an amount equal to the judgment obtained in South Carolina. To the
extent any state has an outstanding Medicaid-related claim not resolved by the settlements referenced above, the
Company has accrued an amount approximately equal to what that state would have received if it had participated in the
relevant federal settlement. State cases that went to judgment after trial are discussed below.
In 2004, the Attorney General of West Virginia commenced a lawsuit against Janssen Pharmaceutica, Inc. (now JPI) based
on claims of alleged consumer fraud as to DURAGESIC®, as well as RISPERDAL®. JPI was found liable and damages
were assessed at $4.5 million. JPI filed an appeal, and in November 2010, the West Virginia Supreme Court of Appeals
reversed the trial court’s decision. In December 2010, the Attorney General of West Virginia dismissed the case as it
related to RISPERDAL®without any payment. Thereafter, JPI settled the case insofar as it related to DURAGESIC®.
In 2004, the Attorney General of Louisiana filed a multi-count Complaint against Janssen Pharmaceutica, Inc. (now JPI).
Johnson & Johnson was later added as a defendant. The case was tried in October 2010. The issue tried to the jury was
whether Johnson & Johnson or JPI had violated the State’s Medical Assistance Program Integrity Law (the Act) through
misrepresentations allegedly made in the mailing of a November 2003 Dear Health Care Professional letter regarding
RISPERDAL®. The jury returned a verdict that JPI and Johnson & Johnson had violated the Act and awarded $257.7
million in damages. The trial judge subsequently awarded the Attorney General counsel fees and expenses in the amount
of $73 million. In January 2014, the Louisiana Supreme Court reversed the District Court’s judgment in favor of the
Attorney General, and rendered judgment in favor of Johnson & Johnson and JPI. In April 2014, the Louisiana Supreme
Court denied the Attorney General’s petition seeking a rehearing of the appellate arguments, resulting in final dismissal of
the case.
In 2007, the Office of General Counsel of the Commonwealth of Pennsylvania filed a lawsuit against Janssen
Pharmaceutica, Inc. (now JPI) on a multi-Count Complaint related to Janssen Pharmaceutica’s sale of RISPERDAL®to the
Commonwealth’s Medicaid program. The trial occurred in June 2010. The trial judge dismissed the case after the close of
the plaintiff’s evidence. The Commonwealth filed an appeal and in July 2012, the Pennsylvania Appeals Court upheld the
dismissal of the Commonwealth’s case.
In 2007, the Attorney General of South Carolina filed a lawsuit against Johnson & Johnson and Janssen Pharmaceutica,
Inc. (now JPI) on several counts. In March 2011, the matter was tried to a jury on liability only, at which time the lawsuit
was limited to claims of violation of the South Carolina Unfair Trade Practices Act, including, among others, questions of
whether Johnson & Johnson or JPI engaged in unfair or deceptive acts or practices in the conduct of any trade or
commerce by distributing the November 2003 Dear Health Care Professional letter regarding RISPERDAL®or in their use
of the product’s FDA-approved label. The jury found in favor of Johnson & Johnson and against JPI. In June 2011, the
Court awarded civil penalties of approximately $327.1 million against JPI. JPI has appealed this judgment and the
Company believes it has strong arguments supporting the appeal. Oral argument on the appeal took place before the
South Carolina Supreme Court in March 2013, and the parties are awaiting a decision.
In April 2012, in the lawsuit brought by the Attorney General of Arkansas, the jury found against both JPI and Johnson &
Johnson, and the Court imposed penalties in the amount of approximately $1.2 billion. In January 2013, the trial court
awarded attorney fees of approximately $181 million. JPI and Johnson & Johnson appealed both awards to the Arkansas
Supreme Court, and in March 2014, the Arkansas Supreme Court dismissed the State’s claim under the Arkansas
Medicaid Fraud False Claims Act, as well as the approximately $1.2 billion in penalties, and reversed and remanded a
claim under the Arkansas Deceptive Trade Practices Act. In April 2014, the Arkansas Supreme Court rejected a petition
by the State for rehearing on the case. Trial on the remand of the case is scheduled for June 2015.
McNeil Consumer Healthcare
Starting in June 2010, McNeil Consumer Healthcare Division of McNEIL-PPC, Inc. (McNeil Consumer Healthcare) and
certain affiliates, including Johnson & Johnson (the Companies), received grand jury subpoenas from the United States
Attorney’s Office for the Eastern District of Pennsylvania requesting documents broadly relating to recalls of various
products of McNeil Consumer Healthcare, and the FDA inspections of the Fort Washington, Pennsylvania and Lancaster,
Pennsylvania manufacturing facilities, as well as certain documents relating to recalls of a small number of products of
other subsidiaries. In addition, in February 2011, the government served McNEIL-PPC, Inc. (McNEIL-PPC) with a Civil
Investigative Demand seeking records relevant to its investigation to determine if there was a violation of the Federal False
Claims Act. The grand jury and False Claims investigations are continuing. The Companies are cooperating with the
United States Attorney’s Office in responding to these investigations.
62 •Johnson & Johnson 2014 Annual Report