Johnson and Johnson 2012 Annual Report Download - page 70

one or more of the following remedies: reimbursement of Medicaid or other public funds for RISPERDAL®prescriptions
written for off-label use, compensation for treating their citizens for alleged adverse reactions to RISPERDAL®, civil fines
or penalties, damages for “overpayments” by the state and others, violations of state consumer fraud statutes, punitive
damages or other relief relating to alleged unfair business practices. Certain of these actions also seek injunctive relief
relating to the promotion of RISPERDAL®. In January 2012, JPI settled a lawsuit filed by the Attorney General of Texas. 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. JPI and Johnson & Johnson have
filed an appeal and believe that they have strong arguments supporting the appeal. In January 2013, the same court
awarded attorney fees of approximately $180 million. This judgment will also be appealed.
The Attorney General of West Virginia commenced suit in 2004 against Janssen Pharmaceutica (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 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 (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 Medicaid Fraud Act (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 August
2012, an interlocutory appellate court affirmed the judgment. In January 2013, the Louisiana Supreme Court accepted
Johnson & Johnson and JPI’s request for appeal. Oral argument on the appeal has been set for March 2013.
In 2007, the Office of General Counsel of the Commonwealth of Pennsylvania filed a lawsuit against Janssen
Pharmaceutica (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 in April 2011, 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
(now JPI) on several counts. In March 2011, the matter was tried on liability only, at which time the lawsuit was limited to
claims of violation of the South Carolina Unfair Trade Practice 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. JPI has appealed this judgment and the Company believes it has
strong arguments supporting the appeal. Oral argument on the appeal has been set before the South Carolina Supreme
Court for March 2013.
The Attorneys General of approximately 40 other states and the District of Columbia indicated an interest in pursuing
similar litigation against JPI, and obtained a tolling agreement staying the running of the statute of limitations while they
pursued an investigation of JPI regarding potential consumer fraud actions in connection with the marketing of
RISPERDAL®. In September 2012, JPI settled with 36 of the states and the District of Columbia non-Medicaid claims in
connection with the sales and marketing of RISPERDAL®and INVEGA®for a total of approximately $181 million, an
amount which had been previously accrued.
In the Company’s opinion, the ultimate resolution of any of the above RISPERDAL®matters is not expected to have a
material adverse effect on the Company’s financial position, although the resolution in any reporting period could have a
material impact on the Company’s results of operations and cash flows for that period.
OMNICARE
In September 2005, Johnson & Johnson received a subpoena from the United States Attorney’s Office for the District of
Massachusetts, seeking documents related to the sales and marketing of eight drugs to Omnicare, Inc. (Omnicare), a
manager of pharmaceutical benefits for long-term care facilities. In April 2009, Johnson & Johnson and certain of its
pharmaceutical subsidiaries were served in two civil qui tam cases asserting claims under the Federal False Claims Act
and related state law claims alleging that the defendants provided Omnicare with rebates and other alleged kickbacks,
causing Omnicare to file false claims with Medicaid and other government programs. In January 2010, the government
62 •Johnson & Johnson 2012 Annual Report