Closing arguments today in fraud trial against drugmaker

— After 10 days of testimony, 30 witnesses and more than 100 pieces of evidence, the state’s Medicaid-fraud lawsuit against drug maker Johnson & Johnson - with a potential $1.2 billion fine - comes down to how 12 Pulaski County jurors answer as many as eight questions that will be presented to them today.

Closing arguments are scheduled for 9 a.m. before Circuit Judge Tim Fox. Company attorneys rested their case Monday morning after calling 17 witnesses over the past week. They claim state lawyers are exploiting a disagreement between the company and federal regulators over its Risperdal medication by exaggerating the importance of faulty scientific studies commissioned by the company.

State attorneys, who presented 13 witnesses at trial, claim the New Jersey-based company, through its Janssen Pharmaceutica subsidiary, downplayed or hid the extent of Risperdal’s potentially dangerous side effects, particularly on children and elderly patients, in its labeling and marketing. The drug maker hid the extent of potential side effects to increase its sales over competitors, state lawyers say.

Risperdal is a popular anti-psychotic medication used to treat mental illness, and a significant moneymaker for the company. But, like its competitors, Risperdal can cause excessive weight gain and diabetes in all patients. For children, the drug can cause a hormonal condition that can affect sexual development, while it increases the risks for strokes in elderly patients.

The Medicaid fraud claim carries a minimum fine of $1.2 billion, based on the number of Risperdal prescriptions the Arkansas Medicaid program paid for over the 3 1/2-year time frame at issue at trial. A deceptive trade-practices claim that is part of the lawsuit could add another $237 million in fines, based in part on company marketing. Imposing the fines will be up to the judge if jurors agree that the company broke state laws.

How jurors will be instructed on interpreting the law remained an issue Monday night, with both sides submitting proposals to Fox, who will have the final say. The judge said he’ll decide on the final form of instructions before arguments begin.

Under the instructions Fox was considering Monday, to win, state lawyers need at least seven members of the six-man, six-woman jury to agree that Johnson & Johnson and Janssen, either together or separately:

Engaged in unconscionable, false or deceptive practices in a November 2003 mailing, known as the “Dear doctor” letter, about Risperdal’s side effects.

Lied or misrepresented information about Risperdal side effects on the medication's label or related materials.

The jury verdict will come in the form of jurors’ answers to a series of written questions they must resolve about the case.

A key source of contention between the sides is over exactly what the state needs to prove to win the Medicaid fraud claim. State lawyers argue that all they have to show is that the drug maker deliberately misrepresented Risperdal’s safety on its label by withholding information about the drug’s risks that it was required to disclose.

But defense attorneys argue that a higher standard applies, saying the state must demonstrate more than just that deception occurred. Company attorneys say the state must also prove that any deception played a material role in some kind of Medicaid related action, like a doctor’s decision to prescribe the drug. The state showed no proof that Rispderal’s label played any role in any decision by Arkansas Medicaid about coverage or payment for the medication, the defense argued.

“There still is no evidence any information on the package insert [label] is false,” defense attorney Ed Posner told the judge. “The state wants to punish Janssen for using a package insert [label] approved over and over and over again by the [Food and Drug Administration].”

Arkansas, Pages 7 on 04/10/2012

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