by Ben Vernia | May 12th, 2011
On May 10, Johnson & Johnson announced in a 10-Q statement filed with the SEC that it was setting aside an undisclosed amount of money for a possible settlement with the government for the company’s antipsychotic drug, Risperdal. According to J&J’s 10-Q:
The United States Department of Justice and the United States Attorney’s Office for the Eastern District of Pennsylvania (the Government) are continuing to actively pursue both criminal and civil actions. In February 2010, the Government served Civil Investigative Demands seeking additional information relating to sales and marketing of RISPERDAL ® and sales and marketing of INVEGA ® . The focus of these matters is the alleged promotion of RISPERDAL ® and INVEGA ® for off-label uses. The Government has notified OMJPI that there are also pending qui tam actions alleging off-label promotion of RISPERDAL ® . The Government informed OMJPI that it will intervene in these qui tam actions and file a superseding complaint.
Discussions are ongoing in an effort to resolve criminal penalties under the Food Drug and Cosmetic Act and civil claims under the False Claims Act (the qui tam actions) related to the promotion of RISPERDAL®. During the quarter ended April 3, 2011, OMJPI recorded a reserve for a potential settlement of the penalties under the Food Drug and Cosmetic Act. No complaint asserting civil False Claims Act claims has yet been served and no reserve has been established with respect to the civil False Claims Act claims. If a negotiated resolution cannot be reached, criminal and civil litigation relating to the allegations of off-label promotion of RISPERDAL ® and/or INVEGA ® is likely. The ultimate resolution of these 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.
