Johnson & Johnson to pay $1 billion to settle probe of Risperdal drug marketing

Johnson & Johnson to pay $1 billion to settle probe of drug marketingsource:  Courier PostJanuary 5, 2012:  Johnson & Johnson have settled to pay over $1 billion in civil and criminal penalties to federal and state governments regarding an investigation into its anti-psychotic drug Risperdal. The FDA approved Risperdal in 1993 and 2003 to treat schizophrenia and bipolar disorder, respectively. Yet, critics allege that Johnson & Johnson had illegally marketed the drug to treat illnesses such as post-traumatic stress disorder and dementia, generating more than $25 billion. Risperdal costs significantly more than generic drugs that are equally as effective, thus costing millions of taxpayer dollars through Medicare and Medicaid.

South Carolina, Louisiana, Pennsylvania, West Virginia, and the Department of Justice have brought suits against Johnson & Johnson.

The $1 billion settlement will hopefully prove to be useful in overcoming the economic losses of Medicare and Medicaid, but it is just a small fraction of the $25 billion income from the drug in question. By the end of the day, Johnson & Johnson stock had decreased by 8 cents. The decrease in performance and size of the settlement payment may suggest that the financial penalties are not sufficient deterrents against alleged unethical practices. Medicare and Medicaid, however, must continue to struggle with the financial and medical complications and consequences of this drug.