The manufacturer of the antipsychotic drug Risperdal owes hundreds of millions of dollars to various states for improperly marketing the drug and encouraging doctors to prescribe it for ailments it was not approved for. The drug is also the subject of personal injury lawsuits for, among other side effects, causing adolescent boys to grow breasts.
Risperdal, manufactured by Johnson & Johnson subsidiary Janssen Pharmaceuticals Inc., came on the market in 1994. It was designed and approved to treat people with schizophrenia. In later years, it was approved to treat bipolar disorder, and irritability in children with autism. In 2007, its approval was extended to treat schizophrenia and bipolar disorder in adolescents.
However, the drug had been regularly promoted for and used to treat children for years before its approval for that purpose, and was also used off-label for illnesses such as dementia, depression and anxiety.
On Sept. 14 the company announced a settlement for $181 million with 36 states and the District of Columbia for consumer fraud. While Janssen did not admit wrongdoing, it did agree to not make false and misleading claims about the drug.
The settlement seems like a good deal for Janssen, since they are getting dinged for far larger sums by individual states. Earlier this month, a Louisiana appeals court affirmed a $330.6 million penalty against the company, while in April an Arkansas judge fined them $1.2 billion, on top of $327 million they were hit with in South Carolina last year. The Arkansas and South Carolina fines are currently under appeal.
The drug is also the subject of a federal investigation which, it is rumored, could cost the manufacturer as much as $1.5 billion.