Trial begins in fraud lawsuit

State, drug firm fight for billions

With as many as 50 people on the witness list, Attorney General Dustin McDaniel’s Medicaid fraud lawsuit against drug maker Johnson & Johnson opens trial this morning, with a victory for state lawyers potentially worth at least $1.25 billion for the Arkansas Medicaid program.

Opening statements before Pulaski County Circuit Judge Tim Fox are scheduled to begin at 9 a.m.

On Monday, six men and six women were selected for the jury that will hear evidence over the next 16 days to decide whether the company, through its Janssen subsidiary, downplayed or outright hid potentially dangerous side effects of the Risperdal medication that could subject patients, particularly children and elderly users, to an increased risk of diabetes and other ailments.

Used to treat schizophrenia and bipolar disorder, Risperdal is one of the most widely prescribed anti-psychotic drugs and a significant source of revenue for the New Jersey-based manufacturer.

State attorneys also claim that Johnson & Johnson promoted the drug for uses not federally approved and want the company penalized for every Risperdal prescription paid for through Arkansas’ Medicaid program between November 2002 and June 2006 - about 250,000 prescriptions.

With the attorney general suing under the Arkansas Medicaid Fraud False Claims Act and the Deceptive Trade Practices Act, the minimum penalty prescribed by law, at $5,000 per violation, is at least $1.25 billion. If the maximum penalty - $10,000 each - is imposed, the award could amount to more than $2.5 billion. Any penalties paid under the fraud statute, Arkansas Code 20-77-903, would go to Medicaid.

Any fines would be determined by the judge after the trial concludes. Mc-Daniel has settled with two other drug makers, Eli Lilly & Co. and AstraZeneca, who make similar medications, for a combined $22.5million.

A Johnson & Johnson representative on Monday promised a “vigorous” defense to the accusations and defended the company’s business practices.

“We are committed to ethical business practices and have policies in place toensure that our products are only promoted for their [U.S. Food & Drug Administration]- approved indication,” spokesman Teresa Mueller said. “If questions are raised about adherence to our marketing and promotion policies, we act quickly to investigate the situation and take appropriate disciplinary action.”

Together, the sides have listed more than 50 potential witnesses for trial, although not all are guaranteed to be called, and some will appear on prerecorded video depositions, court filings show.

Those on the witness list include: John Selig, director of the Arkansas Department of Human Services, which manages the state’s Medicaid program; Dr. Laurence Miller, medical director of the agency’s Division of Behavioral Health Services; and Dr. Steve Domon, Arkansas State Hospital medical director. From the agency’s Medical Services division, which directly oversees Medicaid, witnesses include Medical Director Dr. William Golden, Suzette Bridges, Assistant Director for pharmacy, and pharmacist Pamela Ford.

The list also includes three former state Medicaid directors, Eugene Gessow, Roy Jeffus and Ray Hanley, representing the program’s past 25 years of leadership. The newest director, Andy Allison, who was hired in November, is not on the list.

Others listed include Dr.Irving Kuo and Teresa Hudson with the Central Arkansas Veterans Healthcare System; Scott Pace, associate executive vice president of the Arkansas Pharmacist Association; attorney Justin Allen, McDaniel’s former chief deputy; Dr. Michael Moody, a vice president of Arkansas Foundation for Medical Care; and psychiatrist Brad Diner.

Arkansas, Pages 7 on 03/27/2012

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