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J&J expects further $600m in Risperdal settlement charges

Bill also covers claims involving Invega, Natrecor and pharmacy services company Omnicare

Risperdal JOhnson and Johnson (J&J)

Johnson & Johnson has said it expects to pay out $600m in the second quarter of 2012 to settle claims it had marketed several drugs in indications they were not approved for in the US.

The bulk of the costs are expected to involved the company's marketing of antipsychotic Risperdal (risperidone), which J&J has been accused of promoting to treat both children and elderly patients in care homes even though the Food and Drug Administration (FDA) does not sanction such use.

J&J had previously settled a suit related to such practices in Texas, and also faces a fine of $1.1bn after an Arkansas judge ruled the company misled and hid risks of Risperdal in its marketing of the drug in the state.

Major side effects that Risperdal has been linked to include weight gain, diabetes and an increased risk of stroke.

The latest announcement pushes the total bill up even higher, however, with Bloomberg even reporting claims from sources familiar with the case that the figure for the most recent round of settlement costs could climb as high as $2.2bn.

In addition to covering Risperdal claims, J&J's $600m figure also includes settlements involving the marketing practices of fellow antipsychotic Invega (paliperidone) and Natrecor (nesiritide), which is approved in the US to treat congestive heart failure who have shortness of breath.

Omnicare, a company that provides pharmacy-related services to care homes, has been caught up in the charges too, with claims J&J had made illegal payments to the company for Omnicare to both acquire and recommend the drug to the patients it was looking after.

J&J failed to provide further comment on the matter.

The company is currently appealing an order to pay civil penalties of $327m to the state of South Carolina, and has plans to appeal the Arkansas decision.

Other states that have brought action against the company over Risperdal marketing pratices include West Virginia, Massachusetts, Montana, New Mexico, Pennsylvania and Louisiana, although suits in Pennsylvania and West Virginia have found in favour of the company.

12th June 2012

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