Fish & Richardson Pockets $26 million in Texas’ J&J Settlement

By Janet Elliott

AUSTIN – A fired Pennsylvania state investigator who persuaded Texas officials to look into Johnson & Johnson’s marketing of its best-selling antipsychotic drug Risperdal will receive about $20 million of the state’s $158 million settlement, under a court agreement approved today.

The largest share of the settlement, $63 million, will go to the state and the federal government will receive $49 million, according to Tommy Jacks, a lawyer who represents the whistle-blower, Allen Jones. About $26 million goes to lawyers for the whistleblower for fees and expenses.

The settlement was announced in January midway through a jury trial in Travis County. Texas, which joined whistle-blower Allen Jones’ lawsuit in 2006, had sought as much as $1 billion over allegations that taxpayers overpaid for the drug from 1994-2008 because of the company’s false marketing.

Texas Attorney General Greg Abbott accused J&J of marketing the powerful drug for unapproved uses in children and the elderly. He also accused the company of ignoring its own studies while claiming Risperdal had fewer side effects than competing antipsychotics.

“We’re very pleased,” said Tom Kelley, a spokesman for Abbott. He said it is the largest Medicaid fraud settlement for Texas, topping the $29 million Abbott recovered for the state in a drug pricing case against Actavis.

“Texas really stands out as being the most active and aggressive attorney general’s office in the country in pursuing these cases,” said Jacks, part of a legal team from Fish & Richardson who represented Jones and helped try the case with lawyers from Abbott’s Civil Medicaid Fraud Division.

Jones, who was fired when he wouldn’t give up his probe, was not in court when state District Judge John Dietz approved the settlement disbursement. He was present, and highly emotional, in January when the settlement was announced during the second week of trial. At the time, he said that drug companies would not change their marketing practices until executives go to jail.

Jacks said that Jones is pleased to have the case finally concluded.

“It’s been a very hard eight or nine years for him, but he never wavered in his determination. There would not have been a case but for Allen,” said Jacks. “

J&J denied wrongdoing but said it wanted to settle the long-running litigation. The company said in a statement Tuesday that it is committed to ethical business practices, and has policies in place to ensure its products are only promoted for their FDA-approved indications.

Arkansas opened a trial this week against J&J over its Risperdal marketing, the fifth state to take the company to court. The U.S. Justice Department also has an investigation, the company disclosed.

PLEASE NOTE: Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.