THE ATTORNEY GENERAL OF TEXAS
Ken Paxton

Thursday, January 19, 2012

Texas Attorney General Secures $158 Million Agreement With Drug Maker Over Medicaid Fraud Allegations

AUSTIN Texas Attorney General Greg Abbott today issued the following statement on Johnson & Johnson’s agreement to pay $158 million to resolve the State’s Medicaid fraud claims:

Today’s agreement sends a strong message that the State will pursue those who defraud Texas taxpayers. Johnson & Johnson’s scheme to profit from the Medicaid program by overstating the safety and effectiveness of an expensive drug and improperly influencing officials ended up costing taxpayers millions of dollars.

An Attorney General investigation revealed that Johnson & Johnson and its subsidiary Janssen launched a campaign promoting Risperdal as the superior drug of choice, while at the same time the companies downplayed the harmful side effects of this drug. The companies successfully carried out this campaign by improperly urging physicians to prescribe Risperdal to children and the elderly for schizophrenia and dementia, despite the fact that the drug had not been approved by the U.S. Food and Drug Administration for these uses at the time. The Texas Medicaid program for many years excessively reimbursed pharmacies that dispensed Risperdal prescriptions written by doctors for Medicaid patients for a range of unapproved uses.

Case stemmed from a whistleblower lawsuit filed under seal in 2004.
Johnson & Johnson exaggerated the efficacy of Risperdal as a means to unlawfully profit from Medicaid program.
Johnson & Johnson/Risperdal case is only the second such case to go to trial in Texas.
Actavis Mid-Atlantic, LLC and a co-defendant were the first to opt for a trial in early 2011, ultimately settling with the State of Texas last month for $84 million.
The Texas Attorney General’s civil Medicaid fraud trial team consisted of: Cynthia O’Keeffe, Patrick Sweeten, Eric Brown, Jonathan Bonilla, Reynolds Brissenden, Eugenia Krieg, Sinty Chandy, Damon Ong, Hanz Wasserburger. Support staff on the team were Diana Reed and Jennifer Rowell.