La. Supreme Court Reverses $330M Verdict For Risperdal Medicaid Law Violations

NEW ORLEANS — (Mealey’s) In a 4-3 vote, the Louisiana Supreme Court on Jan. 28 reversed a verdict of more than $330.6 million against Janssen Pharmaceutical Inc. and parent company Johnson & Johnson, finding that the state attorney general failed to prove that misrepresenting the safety of the atypical antipsychotic drug Risperdal violated the state’s Medicaid fraud law (James D. “Buddy” Caldwell, ex rel. State of Louisiana v. Janssen  Pharmaceutical, Inc., et al., Nos. 2012-C-2447 and 2012-C-2466, La. Sup.). 

(Opinion available.  Document #28-140206-006Z.

In 2004, Louisiana Attorney General James D. “Buddy” Caldwell sued Janssen and Johnson & Johnson in the St. Landry Parish Circuit Court, alleging that the defendants misrepresented the safety of Risperdal and that that resulted in thousands of violations of the state Medical Assistance Programs Integrity Law (MAPIL). 

In 2010, a jury found that the defendants’ misconduct in marketing Risperdal violated provisions of MAPIL and assessed a penalty of $7,250 per violation.  The trial judge fined the defendants for 35,146 misleading “dear doctor” letters and 27,542 sales representative calls to doctors about Risperdal and awarded the state civil penalties of $257.6 million, attorney fees of $70 million, costs of $3 million and interest. 

The jury apportioned 90 percent liability to Janssen and 10 percent to Johnson & Johnson. 

‘Failed To Prove’ Violation 

Both Caldwell and the defendants appealed, and in 2012, the Third Circuit Court of Appeal affirmed.  All parties then appealed to the state Supreme Court. 

“[W]e find the Attorney General failed to prove the defendant drug manufacturers, by misrepresenting through off-label statements the potential for the risk of side effects from the use of Risperdal, violated provisions of the Louisiana Medical Assistance Programs Integrity Law, La. Rev. Stat. 46:438.3,” the majority held.  “Having determined the legislature’s intended scope of MAPIL, we find the Attorney General failed to establish sufficient facts to prove a cause of action against the defendants under MAPIL.” 

“There was insufficient evidence adduced that any defendant engaged in fraud, misrepresentation, abuse or other ill practices seeking to obtain, pursuant to a claim made against the medical assistance program funds, payments to health care providers or other persons to which the health care providers or other persons were not entitled,” the majority continued.  “Because we find the Attorney General failed to prove a violation of MAPIL, we pretermit discussion of the remaining evidentiary and penalty issues.” 

The majority reversed the trial court’s judgment and rendered judgment in favor of the defendants. 

The majority opinion was written by Justice Greg G. Guidry.  He was joined by Justices Jeffrey P. Victory, Marcus R. Clark and John L. Weimer. 

Dissent:  Law Sections ‘Conflated’ 

Justice Jefferson D. Hughes III dissented, joined by Chief Justice Bernette J. Johnson and Justice Jeannette Knoll.  Justice Hughes said the majority “conflates the subparts of the definition of ‘misrepresentation’ to include the requirement of a ‘claim’ not provided by the statute.” 

Justice Hughes said “Judicial re-writing of the law to achieve a desired result and overturn a jury verdict is inimical to our system of separated powers.” 

Risperdal is approved to treat schizophrenia and bipolar disorder.  It and other atypical antipsychotic drugs can cause significant weight gain, hyperglycemia and diabetes. 

In 2003, the Food and Drug Administration directed the defendants to send a dear doctor letter about the risks of atypical antipsychotics.  The defendants sent a letter that Risperdal is not associated with an increased risk of diabetes compared to untreated patients or patients treated with conventional antipsychotics.  The letter also said Risperdal was associated with a lower risk of diabetes than other atypical antipsychotics. 

The FDA sent a warning letter to the defendants about the dear doctor letter and ordered them to send a corrective letter, which they did. 

Counsel 

Caldwell and Louisiana are represented by Patrick C. Morrow, James P. Ryan and Jeffrey M. Bassett of Morrow & Morrow in Opelousas, La.; Kenneth W. DeJean of Lafayette, La.; Robert Lyle Salim of Natchitoches, La.; Assistant Attorney General L. Christopher Styron of the Attorney General’s Office in Baton Rouge, La.; Michael W. Perrin and Fletcher V. Trammel of Bailey, Perrin & Bailey in Houston; Kenneth T. Fibich of Fibich, Hampton, Leebron, Briggs & Josephson in Houston; and Robert Cowan of Houston. 

Janssen is represented by James B. Irwin, David W. O’Quinn, Kim E. Moore, Monique M. Garsaud and Douglas J. Moore of Irwin, Fritchie, Urquhart & Moore in New Orleans; James T. Guglielmo and James C. Lopez of Guglielmo Lopez Tuttle in Opelousas; Thomas F. Campion of Drinker, Biddle & Reath in Florham Park, N.J.; and Brian C. Anderson, Michael E. Stamp and Stephen D. Brody of O’Melveny & Myers in Washington, D.C.

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