Johnson & Johnson's courtroom fights over Risperdal resume in Philadelphia on Wednesday, when Commonwealth Court judges are scheduled to hear an appeal of decisions to dismiss Pennsylvania's 2008 lawsuit that alleged the company fraudulently profited from sales of the antipsychotic drug through the Medicaid program.
While Pennsylvania's case did go to trial in Philadelphia, it did not get far. In 2010, a Philadelphia judge threw out the lawsuit, which sought to show that J&J had tricked the state into paying millions more for the drug than it should have.
In some ways, the seeds of what would become a nationwide Risperdal legal effort were sown in Pennsylvania more than a decade ago. Less certain is whether the state will get anything, much less the millions of dollars recovered by other states.
The health-care giant's subsidiary Janssen Pharmaceuticals produces Risperdal, which is approved for use in patients with schizophrenia and bipolar disorder. For a time, it was the company's top-selling drug, and generic versions remain among the most-prescribed products in their category.
But J&J has been accused in lawsuits by states, the federal government, and thousands of individuals of promoting the drugs in improper ways, overstating the benefits or understating the risks. The government accusations involve claims for reimbursements of drug purchases through insurance programs such as Medicare and Medicaid that would not, in theory, have been made without the allegedly improper conduct.
In 2010, a Louisiana jury awarded that state $258 million. In 2011, a South Carolina judge said J&J had to pay $327 million. In April, after a jury found in favor of the State of Arkansas, the judge fined J&J $1.1 billion. J&J plans to appeal. The U.S. government is negotiating with J&J over possible criminal and civil charges, with Bloomberg News reporting the fine could be at least $1.8 billion.
In Texas, J&J paid $158 million to settle a case after a trial had begun. That case stemmed from a whistle-blower lawsuit filed by Allen Jones, a former Pennsylvania state employee.
An investigator for the state Office of Inspector General, Jones began his investigation in July 2002, after officials discovered an unauthorized bank account used by three state mental-health officials for travel, meals and other expenses. J&J and Pfizer made payments directly into a fund or to state health officials who helped formulate state medication policy that encouraged using the companies' new line of antipsychotic medicines, Risperdal and Geodon. There were also payments for speaking engagements, in which officials would travel to promote the Pennsylvania program and, in effect, the drugs. Three officials were eventually convicted of ethics violations. But after showing the results to state officials, Jones' findings were ignored and then, after he took his story to the New York Times, he was fired in 2004.
"I assisted the State of Texas in the recovery of $158 million dollars expended as the result of J&J's fraudulent marketing of Risperdal," Jones wrote via e-mail. "I could have assisted the state of Pennsylvania in establishing and prosecuting the exact same fact pattern which prevailed in Texas. Not only was Pennsylvania not interested in pursuing these facts, I was fired when I went public with allegations of corruption which were being covered up. The state did not include a single element of my findings in the case against J&J. [Former Gov. Ed] Rendell's case was so weak it was rightfully thrown out of court.
"The current governor, attorney general and inspector general have likewise refused to act on the facts I uncovered. I was told that my concerns did not rise to the level of waste, fraud, abuse or mismanagement."
J&J said in a statement: "We continue to believe that the trial judge was correct in granting our motion for non-suit, which effectively dismissed the case filed against the company in Pennsylvania. The commonwealth had no evidence of wrongdoing by our company and no basis for its lawsuit. Janssen continues to be strongly committed to ethical business practices."
Current Inspector General Kenya Mann Faulkner declined comment, a spokeswoman said.
Corbett became attorney general just after Jones was fired, but he declined to file suit against J&J as other attorneys general have done. Rendell was governor when the suit was filed through his office of general counsel.
Rendell added that the state should continue to continue the court fight. "If other states are recovering significant amounts of money," he said, "Pennsylvania should continue to pursue it to get money back for taxpayers."
Kevin Harley, Corbett's spokesman, said Corbett now wanted the case to proceed.
Attorney General Nancy Kelly's spokesman Nils Fredericksen said Kelly would not comment on legal advice given to the governor or any state department leader.