LITTLE ROCK — The state has vastly overestimated its deceptive-trade practices claim against Johnson & Johnson, company attorneys argued Thursday, the eighth day of Arkansas’ Medicaid-fraud lawsuit over the company’s Risperdal drug.
State lawyers claim that Johnson & Johnson, through its Janssen Pharmaceutical subsidiary, concealed or downplayed the antipsychotic drug’s potentially dangerous side effects, particularly for children and elderly patients, to increase its sales over competitors with similar medications. Risperdal is widely prescribed to treat conditions like schizophrenia and bipolar disorders.
Company lawyers say the drug manufacturer has always been upfront in disclosing Risperdal’s risks, making them well known in the medical community. The lawyers have accused the state of attempting to exploit a legitimate disagreement between the company and federal regulators about the drug’s side effects by exaggerating the importance of two “bad” scientific studies of the medication commissioned by the company.
The state’s fraud claims against Johnson & Johnson carry a potential $1.25 billion fine, based on the number of Risperdal prescriptions — at least 238,874 — paid for by the Arkansas Medicaid pro- gram over a 3 1/2-year period from November 2002 through June 2006.
The deceptive-trade-practices accusations against Johnson & Johnson could add another $237 million in penalties. Each violation carries a potential $10,000 fine.
About 20 percent of the fine is based on a November 2003 Janssen mailing sent to 4,559 Arkansas health-care professionals. The state is considering each mailing a violation.
The bulk of the fine, based on the state’s calculations, would come from the number of sales calls made by company representatives. A state computer expert has reported 19,168 such calls, based on his analysis of a company salescall database.
On Thursday, William Wecker of California, a defense statistician, criticized the state’s findings in testimony to Pulaski County Circuit Judge Tim Fox in a hearing outside the presence of the jury. The state did not account for duplicate calls and whether the call was made to a doctor, he said. His review of the call data found at most 1,824 Risperdal calls, he said.
Some Arkansas customers could have received as many as 10 calls, Wecker told the judge. Focusing only on calls made to doctors, he testified, would reduce the number of applicable calls to as few as 1,499.
Wecker also testified that the Arkansas Medicaid program paid about $8.1 million for Risperdal during the 3 1/2-year time period in question. The state spent about $5 per prescription a day, he said, but that amount was reduced to less than $1 per prescription by rebates and federal subsidies.
Proceedings are to resume at 9 a.m. today, with the defense calling Dr. Mark Molitch, an endocrinologist at the Feinberg School of Medicine at Northwestern University in Chicago.
The trial appears to be winding down, with the defense possibly resting its case Monday. Still pending before the judge is a defense dismissal motion based on the size of the fines, which company lawyers argue exceeds constitutional limits.
Arkansas, Pages 9 on 04/06/2012