Arkansas can pursue only the deceptive-marketing accusation against Johnson & Johnson that its lawyers brought to the first trial three years ago, a Pulaski County circuit judge has ruled.
Judge Tim Fox on Monday set some boundaries for state lawyers as they prepare for the June retrial of the New Jersey-based company over how it had marketed the popular anti-psychotic Risperdal.
Fox's one-page ruling limits the attorney general's office to presenting only its allegation that Johnson & Johnson, in a November 2003 mailing to Arkansas physicians known as the "Dear Doctor" letter, did not accurately disclose the extent of the drug's potential to cause diabetes.
The litigation, which included Medicaid fraud accusations, has been ongoing since 2007.
The state contends the company, through its subsidiary, Janssen Pharmaceuticals, deliberately hid or downplayed potentially dangerous side effects of the medication, including risks of diabetes in all users, the possibility of aberrant sexual development in children, and the medication's potential to cause strokes in elderly patients, all to increase its sales over competitors.
Arkansas won $1.2 billion in fines against the company in an April 2012 jury trial over the state's accusations of Medicaid fraud and violations of the state Deceptive Trade Practices Act.
Most of the fines were derived under the Medicaid Fraud False Claims Act with a $5,000 penalty for each of the 238,874 Risperdal prescriptions paid for by state Medicaid between December 2002 and June 2006.
But the Arkansas Supreme Court overturned the jury verdicts and the fines last March.
The high court's dismissal of the Medicaid fraud accusations negated the bulk of the $1.2 billion penalty. The justices stated that the Medicaid Fraud False Claims Act could be applied only to health care facilities, not to companies such as Johnson & Johnson. The court ruling does not allow the state to pursue the fraud allegations further.
But the high court's decision to reverse the verdict that the "Dear Doctor" letter violated the deceptive trade law allows the attorney general's office to re-litigate those claims. They resulted in an $11,422,500 fine at trial, but the justices overturned the verdict in ruling that jurors had been allowed to see improper evidence.
The attorney general's office will bring the deceptive-trade accusations before a jury again at a two-week trial in June.
State lawyers had argued that they should be able to present all of the deceptive-trade accusations they made in their lawsuit, even if they didn't raise them at trial. Those allegations were never dismissed, so they should be allowed at the new trial, the state lawyers argued.
But Fox sided with the drug-company attorneys on Monday, ending eight months of arguments.
The drug-company lawyers had countered that there's no provision under the case law for the state to revive allegations its lawyers chose not to put forward at trial. Arkansas is restricted by the high court's opinion to just pursuing the letter to doctors, they argued.
Plus, the state attorneys had previously reported to both the judge and the state Supreme Court that they did not intend to pursue those accusations, the drug-company lawyers argued in court filings.
The accusations the state had hoped to present at the new trial were claims that Janssen had promoted Risperdal for unapproved uses, known as "off label," such as treating dementia and Alzheimer's disease in adults and depression and attention-deficit disorders in children.
Metro on 02/04/2015