A $150 million False Claims Act jury verdict against Janssen Products ballooned on Friday into a $1.6 billion final judgment against the company in a whistleblower lawsuit brought over its off-label promotion of HIV drugs.
U.S. District Judge Zahid N. Quraishi issued the 35-page final judgment Friday morning. The court trebled the $120 million in damages the jury found the federal government suffered as a result of Janssen’s conduct to $360 million and assessed a civil penalty of $8,000 for each of the 159,574 false claims the jury found Janssen had submitted to the government, for a total civil penalty of $1,276,592,000.
“The Court is convinced that Janssen engaged in a deliberate and calculated scheme that spanned several years and involved the unlawful marketing of its products,” he wrote. “The evidence at trial also demonstrated that Janssen was aware of the seriousness of its conduct, and entered into at least three agreements with the Government in the past to resolve allegations related to [off-label] marketing of other drugs.”
Reese Marketos was hired onto the False Claims Act case in 2022 after the case had been litigated for a decade. The firm believes, but is still working to confirm, that the case resulted in the largest judgment ever entered in an FCA case.
“The qui tam provisions exist for a reason and this is a prime example of why they exist,” Reese Marketos partner Josh Russ said. “Our relators, our clients, are the real heroes today. They fought this and lived it for 12-plus years.”
Reese Marketos partner Pete Marketos echoed that sentiment.
“It’s rewarding to be able to deliver justice,” he said. “It’s rewarding that we have a jury verdict, and a jury system and the federal judiciary involved in vindicating the taxpayers and Medicare in this case.”
Two former Janssen Products sales representatives, Jessica Penelow and Christine Brancaccio, filed the qui tam lawsuit over the company’s off-label promotion of HIV drugs in December 2012.
In 2016, the U.S. Department of Justice declined to take over the case. Judge Quraishi denied Janssen’s motion for summary judgment in December 2021.
The whistleblowers had alleged that between 2006 and 2014 Janssen was falsely advertising that Prezista would not affect a user’s cholesterol or triglyceride levels. The drug’s FDA-approved label stated adverse effects of the medication included high cholesterol and triglycerides.
The whistleblowers also alleged the company was misleading in its marketing of Intelence by claiming the drug was safe and effective for once-a-day use for patients who hadn’t previously taken antiretroviral drugs used to treat HIV, while the label said patients who had previously taken such medication should take Intelence twice a day.
The trial team of five lawyers secured a $150 million jury verdict in June. The New Jersey jury determined Janssen products violated the federal FCA and 27 state statutes, and jurors found that Janssen submitted 159,574 false federal claims to Medicare and Medicaid.
Janssen issued a statement after the verdict was issued, vowing to appeal:
“The jury has correctly rejected the claims relating to Janssen’s speaker bureau for PREZISTA® and INTELENCE® and the majority of the claims related to the marketing of PREZISTA® and INTELENCE®. We continue to believe that Janssen’s marketing and promotion of these life-saving medications has always been consistent with the FDA approved labels. The decision on the promotional claims is predicated on a clearly erroneous jury instruction that is contrary to the law and we are confident will be reversed on appeal.”
That statement apparently drew the ire of Judge Quraishi, who referenced it in his final judgment Friday as an example of Janssen’s failure “to accept responsibility for its conduct.” Reference to the press statement came during the portion of Judge Quraishi’s judgment determining whether to assess a civil penalty against Janssen of $5,500 per false claim or $11,000 per false claim.
“While the need for deterrence, possible recidivism, Janssen’s evidenced pattern of misconduct, and its refusal to accept responsibility counsel in favor of the Court imposing a higher civil penalty, the lack of evidence regarding patient harm and general fairness principles counsel against the Court imposing the maximum penalty,” he wrote.
He settled on a fine of $8,000 for each false claim, writing that “a penalty near the middle of the statutory range both reflects the seriousness of the offense, and is not so grossly disproportionate to the jury’s finding of actual damages that it would constitute excessive punishment or a breach of due process under the U.S. Constitution.”
Marketos told The Lawbook on Friday that they had asked the judge to award a civil penalty of $9,000 per false claim.
“He was very considerate and deliberate and took everything into account,” Marketos said of Judge Quraishi’s decision. “… He could have whacked them with the whole amount, but it shows how reasoned his opinion was.”
Judge Quraishi held that there was “ample evidence to support the jury’s verdict of liability under the FCA.”
“It is not the Court’s role to second-guess the jury’s fact-finding and consideration of the evidence,” he wrote.
But the jury’s finding that Janssen had violated 27 state statutes did not withstand Judge Quraishi’s scrutiny, and he axed the panel’s award of about $30 million in damages to the states under the FCA. He wrote that the whistleblowers “failed to present sufficient evidence or analysis regarding the elements or scope of each state FCA at trial, despite the Court’s warning prior to closing arguments, and that it was error to accept Relator’s proposed jury instruction.”
“To be clear, whether or not Relators carried their burden of proof under the state law claims has no bearing on the jury’s finding of liability and damages under the federal FCA,” he wrote. “In assessing Janssen’s liability under the federal FCA, the jury independently determined that Janssen had caused the submission of 159,574 claims to the government, and that the United States suffered $120,004,736 as a result of these violations.”
The whistleblowers are also represented by Philadelphia law firm Berger & Montague and Andrew Wirmani, Adam Sanderson and Whitney Wendel of Reese Marketos.
Janssen was represented at trial by Allison Brown of Skadden, Arps, Slate Meagher & Flom, who has since moved to Kirkland & Ellis, and by lawyers from Troutman Pepper Locke.
The case number is 3:12-cv-07758.
Krista Torralva contributed to this report.