J&J Close to Settling With DOJ Over Marketing: WSJ

June 24, 2012

(Reuters) Jun 21 - Johnson & Johnson is close to reaching a settlement with the U.S. Justice Department over allegations it promoted anti-psychotic drug Risperdal (risperidone) for unapproved uses that could cost the healthcare conglomerate at least $1.5 billion, the Wall Street Journal reported on Wednesday.

The report, citing anonymous sources familiar with the matter, said the sides are discussing a deal of between $1.5 billion and $1.7 billion that could be finalized in a few weeks. It also said the final amount could exceed $2 billion.

J&J declined to comment on the report. The Justice Department also had no comment.

Earlier this month, the company said it would take a special charge of about $600 million in the second quarter to bolster reserves for a potential settlement of civil lawsuits related to how it marketed Risperdal and other drugs.

J&J is facing a number of lawsuits from states that allege it improperly marketed Risperdal for patients and conditions for which it was not approved by U.S. regulators - including to elderly residents of nursing homes.

Federal prosecutors in Washington, D.C., nixed a tentative $1 billion settlement with J&J earlier this year and were holding out for more, according to published reports.

In 2009, Pfizer Inc agreed to pay $2.3 billion to settle an investigation into the illegal promotion of withdrawn pain drug Bextra (valdecoxib) and other medicines - the largest penalty to date paid by a drugmaker for illegal marketing.

Risperdal, formerly one of J&J's biggest products before going off patent, is approved to treat schizophrenia, bipolar disorder and irritability associated with autism.


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